Economics unit 1- definition list 1

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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


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