Consumers, Producesrs And The Efficient Of Markets Flashcards
What is allocative efficiency
Resource allocation where the value of the output by sellers matches the value placed on that output by buyers
What is well-being
Happiness or satisfaction with life as reported by individuals
Definition of cost
The value of everything a seller must give up to produce a good
Producer surplus
Amount a seller is paid for a good minus the sellers cost
What is the general equilibrium
The notion that the decisions and choices of economic agents are coordinated across markets
What is efficiency
The property of a resource allocation of max. The total surplus received by all members of society
Pareto improvement
When an action makes at least one economic agen better off without harming another economic agent
Equity
The property of distributing economic prosperity fairly among the members of society
Social welfare function
The collective utility of society which is reflected by consumer and producer surplus
