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13 Cards in this Set
- Front
- Back
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Willingness to pay |
The maximum price a consumer is prepared to pay for a good |
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Individual consumer surplus |
The net gain to an individual buyer from the purchase of a good equal to the difference between the buyer's willingness to pay and the price paid |
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Total consumer surplus |
The sum of the individual consumer surpluses of all the buyers of a good in a market |
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Consumer surplus |
A term often used to refer both to the individual consumer surplus and to Total consumer surplus |
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Cost |
(Of seller) the lowest price at which a seller is willing to sell a good |
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Individual producer Surplus |
The net gain to an individual seller from selling a good, equal to the difference between the price received and the sellers cost |
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Total producer Surplus |
The sum of the individual producer Surplus is of all the sellers of a good in a market |
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Producer Surplus |
A term often used to refer both to the individual producer Surplus and to total producer Surplus |
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Total Surplus |
The total net gain to consumers and producers from trading in the market. The sum of the producer Surplus and the consumer surplus |
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Property rights |
The rights of owners of valuable items, whether resources or Goods, to dispose of those items as they choose. |
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Economic signal |
Any piece of information that helps people make better economic decisions |
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Inefficient |
Describes a market or economy in which there are missed opportunities: some people could be made better off without making other people worse off |
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Market failure |
The failure of a market to be efficient |
