Mankiw, Chapter 7

Producer surplus

Benefit to sellers in participating in a market

Laissez faire

Let alone policy

Equality

The property of distributing economic prosperity uniformly among the members of society

Efficiency

The property of resource allocation of maximizing total surplus received by all members of society

Market power

Ability to influence prices

Producer surplus

Amount a seller is paid for a good minus the seller's cost

Total surplus

CS+PS or Value to buyers - Cost to sellers

Market power

Can cause markets to be inefficient because it keeps price and quantity from the equilibrium of supply and demand

Market demand curve

Depicts the various quantities that buyers would be willing and able to purchase at different prices

Consumer surplus

Measures economic welfare from the buyer's side

Consumer surplus

Measures the benefit that buyers receive from a good as the buyers themselves perceive it

Consumer surplus

The amount a buyer is willing to pay for a good minus the buyer actually pays for it

Equity

The fairness of the distribution of well-being among buyers and sellers

Willingness to pay

The maximum amount that a buyer will pay for a good

Welfare economics

The study of how the allocation of resources affects economic well-being

Cost

The value of everything a seller must give up to produce a good