ECON 1000 Lecture 5: Chapter 5 Notes
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ECON 1000 Full Course Notes
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Chapter 5- efficiency and equity (5. 2 and 5. 3) Market equilibrium: when demand and supply are equal. Consumer surplus difference between what you are willing to pay and what you actually pay (willing to pay , ended up paying and so you can enjoy. Personal characteristics (unequal distribution because of race and colour) 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 system allocates resources by the order (command) of someone in authority. 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.