Chapter 7 Journal

Chapter 7 basically introduced us the basic tools of welfare economics which is consumer and producer surplus. Consumer and producer surplus is used to evaluate the efficiency of free markets. No dictator or political party can allocate resources efficiently with a central economic plan better than the forces of supply and demand, or the invisible hand. Even though every single buyer and seller only cares about their own little agenda, they are unknowingly led by the invisible hand to a point of equilibrium where it maximizes the profit for both buyers and sellers. 
  Consumer surplus is equivalent to the buyers’ willingness to pay for a good minus the amount they actually pay for it, and it measures the benefit buyers get from participating in a free market. Consumer surplus can be found by finding the area below the demand curve and above the price. On the flip side, producer surplus equals the amount of money sellers receive for their goods minus the actual amount of production, and it measures the benefit sellers get from participating in a market. Producer surplus can be found by finding the area below the price and above the supply curve. A maximization of the sum of producer and consumer surplus is the most efficient. 

I would rate this chapter a difficulty rating of 1/3. It was a very easy concept to grasp and the multitudes of graphs simplified the math portion of the chapter.