Economics 1021A/B Lecture Notes - Lecture 15: Market Price, Market Failure, Deadweight Loss

• School: Western University
• Department: Economics
• Course: Economics 1021A/B
• Professor: Deanna Walker

Document Summary

*market price: when a market allocates a scarce resource, the people who get the resource are those who are willing to pay the market price. Most of the scarce resources that you supply get allocated by market price. You sell your labor services in a market, and you buy most of what you consume in markets. For most goods and services, the market turns out to do a good job. *command: command system allocates resources by the order (command) of someone in. For example, if you have a job, most likely someone tells you what to do. Your labor time is allocated to specific tasks by command. A command system works well in organizations with clear lines of authority but badly in an entire economy. authority. *majority rule: majority rule allocates resources in the way the majority of voters choose. Societies use majority rule for some of their biggest decisions.