Chapter 14 Flashcards
Consumer Surplus
The difference between the value of a unit of a good to the buyer and what the buyer actually pays for it
Deadweight Loss
The dollar value of potential benefits not achieved due to inefficiency in a particular market
Economic efficiency
A situation in which every possible Pareto Improvement is being exploited
Market consumer surplus
The total consumer surplus enjoyed by all consumers in a market
Market producer surplus
The total producer surplus gained by all sellers in a market
Pareto Improvement
An action that makes at least one person better off, and harms no one
Producer Surplus
The difference between what the seller actually gets for a unit of a good and the cost of providing it
Total Benefits
The sum of consumer and producer surplus in a particular market
