1. CS & PS
   1. CONSUMER SURPLUS
      1. DEF
         1. The Δ between
            1. how much consumers is WILLING to pay
            2. how much they ACTUALLY pay when buying it
      2. ILLUSTRATION
         1. the area among
            1. DC
            2. the PRICE LINE
      3. FUNCTION
         1. measures how much the consumer gains from buying Gs
         2. effect
            1. the welfare of the buyers
   2. PRODUCER SURPLUS
      1. DEF
         1. The Δ between
            1. the market price
            2. the MIN price required for S to produce certain Gs
      2. ILLUSTRATION
         1. The are between
            1. SC
            2. the PRICE LINE
      3. FUNCTION
         1. measures how much the producer gains from selling Gs in Market
         2. effect
            1. the welfare of the suppliers
   3. ECON EFFICIENCY
      1. role
         1. measuring E performance
         2. assessing the impact of alternative government policies on the E
      2. assessment
         1. Deadweight loss: area A + B
         2. Negative PS & Negative CS
         3. efficient
2. E of S
   1. DEF
      1. the responsiveness (sensitivity) of QS to a Δ in price of a product
      2. Es = % ΔQS / % ΔP
   2. The elasticity of S will be greater the longer the time period under consideration
   3. DETERMINANTS
      1. the number of producers
      2. the existence of spare capacity
      3. ease of storing stocks
      4. time lag
      5. factor mobility -- i.e.
      6. length of the production period -- i.e.
3. E of D
   1. DEF
      1. the responsiveness (sensitivity) of QD to a Δ in one of the determinants of D (eg: price)
   2. INFLUENCES
      1. Δ PRICE
         1. determinants
            1. Number and closeness of substitutes
            2. Luxurious vs. Necessitive
            3. The expenditure as a proportion of Y
            4. Non-functional factors
            5. addictivity
            6. bandwagon effect etc.
            7. Time lag after a price change
         2. CALCULATION
            1. X can be Price, Y, or price of others
      2. CROSS PRICE
         1. Substitutes (+)
         2. Complementaries (-)
      3. Δ Y
         1. Inferior goods (-)
         2. Normal goods (+)
   3. EFFECTS
      1. level of elasticity
         1. perfectly elastic
         2. elastic
            1. % ΔQd > % ΔP
         3. unitary elastic
            1. % ΔQd = % ΔP
         4. inelastic
            1. % ΔQd < % ΔP
         5. perfectly inelastic
            1. % ΔQd = 0
      2. elasticity varies along DC
      3. E & TR
         1. Total Revenue
            1. Totol Revenue
            2. decrease
            3. increase
            4. constant
            5. constant
            6. decrease
            7. increase
         2. When P change
            1. if D is ELASTIC
            2. TR to change in the opposite direction
            3. if D is INELASTIC
            4. TR to change in the same direction