ECON 1000 Chapter Notes - Chapter 5: Demand Curve, Economic Surplus, Marginal Utility
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ECON 1000 Full Course Notes
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Efficiency and equity: evaluate the ability of markets to allocate resources efficiently and fairly. If you pay the market price, you get their source. Allocates resources to those who are first in line. Allocates resources in the way that a majority of voters choose. The benefit a person receives from consuming one more unit of a good. We measure marginal benefit by the maximum price that we are willingly pay for another unit of the good or services. The demand curve is the marginal benefit curve. The value of a good: the maximum price a consumer is wiling to pay for a good. The difference between the amount that buyers would be willing to pay for a good and the actual amount they do pay. The size of consumer surplus is affected by the market price. Individual demand curve: the relationship between the quantity demanded of a good by a single individual and its price.