Unit 1 Definitions-
What is consumer surplus?
1) Consumer surplus is the extra amount of money consumers are willing and able to pay for a good or service above the equilibrium price level
2) Allocative efficiency when resources are distributed in such a way that no consumer can be made better off without other consumers becoming worse off.
3) An Ad Valorem tax is an indirect tax, which is charged as a percentage of the price of a good
4) Asymmetric information - occurs when one party involved in the economic transaction has more knowledge than the other
5) A Buffer Stock scheme - is when the government introduces both a minimum and maximum price that the price of a good cannot move outside
6) command economy- one in which there is no private sector
7) Complements are Goods that are used together
8) consumer surplus - Is the extra amount of money consumers are prepared to pay for a…