Chapter 7 Flashcards
1
Q
welfare economics
A
the study of how the allocation of resources affect economic well-being
2
Q
willingness to pay
A
the maximum amount that a buyer will pay for a good
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
4
Q
cost
A
the value of everything a seller must give up to produce a good
5
Q
producer surplus
A
the amount a seller is paid for a good minus the sellers cost of providing it
6
Q
efficiency
A
the property of a resource allocation of maximizing the total surplus received by all members of society
7
Q
equality
A
the property of distributing economic prosperity uniformly among the members of society
