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Hannah Microeconomics Chapter 7
Definitions
8
Economics
Undergraduate 1
11/06/2011

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Term
welfare economics
Definition
the study of how the allocation of resources affects economic well-being
Term
willingness to pay
Definition
the maximum ammount that a buyer will pay for a good
Term
consumer surplus
Definition
the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for it
Term
cost
Definition
the value of everything a seller must give up to produce a good
Term
producer surplus
Definition
the amount a seller is paid for a good minus the seller's cost of providing it
Term
efficiency
Definition
the property of a resource allocation of maximizing the total surplus received by all members of society
Term
equality
Definition
the property of distributing economic prosperity uniformly among the members of society
Term
market failure
Definition
the inability of some unregulated markets to allocate resources efficiently
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