Chapter 7

welfare economics

the study of how the allocation of resources affects economic well-being
willingness to pay

the maximum amount a buyer is willing to pay for a good
consumer surplus

a buyer's willingness to pay minus the amount the buyer actually pays
marginal buyer

the buyer who would leave the market first if the price were to rise
cost

the value of everything a seller must give up to produce a good
producer surplus

the amount a seller is paid minus the seller's cost
marginal seller

the seller who would leave the market first if the price were to drop
total surplus

the sum of consumer and producer surplus

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Chapter 7

Description

A.P. Economics textbook, Chapter 7 vocabulary

Updated

2010-05-19T00:01:25Z

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