Flashcards in Unit 6 Deck (13):
resource goes to the person who is willing and able to purchase it at the price set in the market
Resources can be allocated through a command system where a person, government, or such makes the decisions about how the resources are allocated
With majority rule, the allocation of resources is, however, the majority chooses to allocate those resources through voting
With a contest, resource allocation is decided through competition
Whoever gets to the resource first can take the resource
Exactly as it seems—dividing the resource up and divvying it up into equal amounts
Leaving the allocation up to chance
Giving the resources to the person based on certain personal characteristics
Taking the resources by force; forcing residents to adhere to the redistributive law of the land
Markets are said to reach allocative efficiency...
when goods are produced in combinations that match people’s willingness to pay
Consumer surplus (CS):
difference between the maximum amount a consumer is willing to pay and the amount that he/she actually has to pay
Minimum price a firm needs to charge for another unit is..
the marginal cost (MC) associated with that unit