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Economics-Mankiw-P3
Definitions of the newest Mankiw (Special edition with financial crisis) Ch. 7-9
| Question | Answer |
|---|---|
| Welfare economics | the study of how the allocation of resources affects economic well-being |
| Willingness to pay | the maximum amount that a buyer will pay for a good |
| Consumer surplus | a buyer's willingness to pay minus the amount the buyer actually pays |
| Cost | the value of everything a seller must give up to produce a good |
| Producer surplus | the amount a seller is paid for a good minus the seller's cost |
| Efficiency | the property of a resource allocation of maximizing the total surplus received by all members of society |
| Equity | The property of distributing economic prosperity fairly among the members of society |
| Deadweight loss | the fall in total surplus that results from a market distortion, such as a tax |
| World price | the price of a good that prevails in the world market for that good |
| Tariff | a tax on goods produced abroad and sold domestically |
| Import quota | a limit of the quantity of goods that can be produced abroad and sold domestically |
| Customs union | a group of countries that agree not to impose any restrictions at all on trade between their own economies, but to impose the same restrictions as one another on goods imported from countries outside the group |
Created by:
Medardus
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