Vocabulary Review Flashcards
1
Q
Deadweight Loss
A
the decrease in total surplus that results from an inefficient underproduction or overproduction
2
Q
Command System
A
a system that allocates resources by the order of someone in authority
3
Q
Big Tradeoff
A
a tradeoff between efficiency and fairness that recognizes the cost of making income transfers
4
Q
Consumer surplus
A
the marginal benefit from a good or service minus the product paid for it, summed over the quantity consumed
5
Q
Producer Surplus
A
the price of a good minus the marginal cost of producing it, summed over the quantity produced
6
Q
Inferior Good
A
a good for which demand decreases when income increases
7
Q
Normal Good
A
a good for which demand increases when income increases
