Chapter 7 Flashcards

1
Q

welfare economics

A

the study of how the allocation of resources affect economic well-being

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2
Q

willingness to pay

A

the maximum amount that a buyer will pay for a good

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3
Q

consumer surplus

A

the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it

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4
Q

cost

A

the value of everything a seller must give up to produce a good

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5
Q

producer surplus

A

the amount a seller is paid for a good minus the sellers cost of providing it

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6
Q

efficiency

A

the property of a resource allocation of maximizing the total surplus received by all members of society

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7
Q

equality

A

the property of distributing economic prosperity uniformly among the members of society

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