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11 Cards in this Set
- Front
- Back
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Willingness to pay (reservation price) |
The maximum price that a buyer would be willing to pay for a good or service |
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Willingness to sell |
The minimum price that a seller is willing to accept in exchange for a good or service |
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Surplus (excess supply) |
A situation in which the quantity of a good that is supplied is higher than the quantity demanded |
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Consumer surplus |
The net benefit that a consumer receives fro purchasing a good or service, measured by the difference between willingness to pay and he actual price |
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Consumer surplus |
The net benefit that a consumer receives fro purchasing a good or service, measured by the difference between willingness to pay and he actual price |
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Producer surplus |
The net benefit that a producer receives from the sale of a good or service, measured by the difference between the producer's willingness to sell and the actual price |
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Total surplus |
A measure of the combined benefits that everyone receives from participating in an exchange of goods or services |
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Zero-sum game |
A situation in which whenever one person gains, another loses an equal amount, such that the net value of any transaction is zero |
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Zero-sum game |
A situation in which whenever one person gains, another loses an equal amount, such that the net value of any transaction is zero |
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Efficient market |
An arrangement such that no exchange can make anyone better off without someone becoming worse off |
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Deadweight loss |
A loss of total surplus that occurs because the quantity of a good that is bought and sold is below the market equilibrium quantity |
