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Welfare economics > Related Articles
From Citizendium, the Citizens' Compendium
Definitions
- Allocative efficiency [r]: The efficiency with which available resources are allocated between the production of alternative combinations of products (see economic efficiency). [e]
- Consumer's surplus [r]: The excess of the amount that a consumer would be willing to pay for a product over its market price (see supply and demand) [e]
- External economy [r]: A benefit that is due to the activities of others. [e]
- Externality [r]: A cost of production that is not borne by the producer (see microeconomics: production). [e]
- Flexible prices [r]: A situation in which prices act instantaneously to bring supply into equality with demand (see supply and demand). [e]
- General equilibrium [r]: The state of a set of inter-related markets such that there is no excess supply nor excess demand in any market (see Supply and demand). [e]
- Marginal cost [r]: The cost of producing one additional unit of a product. [e]
- Marginal product [r]: The additional output of a product produced by the application of one additional unit of input. [e]
- Pareto-efficient [r]: An optimum situation in which it would be impossible to make anybody feel better-off without making somebody feel worse-off (see economic efficiency). [e]
- Perfect competition [r]: The property of a hypothetical market in which no producer or consumer has the power to influence prices, each producer and each consumer acts independently, all products have identical qualities that are known to everybody, and there are no barriers to entry (see competition). [e]
- Production possibility frontier [r]: The combinations of different outputs that can be produced when all inputs are being used efficiently (see economic efficiency:productive efficiency). [e]
- Productive efficiency [r]: The efficiency with which inputs are combined in the production of an output (see economic efficiency). [e]
- Public good [r]: A commodity that can yield utility to a person without diminishing its utility to others, and from the use of which it is not possible to exclude anyone (see also microeconomics: public goods). [e]
