ECON 1B03 Lecture Notes - Lecture 5: Avoidance Speech, Excludability, Beekeeping
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ECON 1B03 Full Course Notes
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Economic welfare: benefits consumers and firms receive by participating in the market (buying and selling) Every buyer in an economy is only willing to pay up to a certain amount for a good/service. Willingness to pay: the maximum amount that a buyer is willing to pay for a good. Measures the value the buyer places on the good. The most you would pay for a good or service. E(cid:454)t(cid:396)a (cid:1006)(cid:1009)$ the(cid:455) do(cid:374)"t ha(cid:448)e to spe(cid:374)d. If someone is willing to pay up to 75$, and they walked in and saw 50$, they are happy. Anyone willing to pay more than 50 have a benefit. What they are willing to pay what they actually payed. Demand curve tells you the willingness they are willing to pay. If we look at this for every price and the willingness. Total benefit that consumers in the market receive when they bought all the goods.