Foundations of Economics, 8th Edition

6 Efficiency and Fairness of Markets

Should price gouging be illegal?

Chapter Checklist

When you have completed your study of this chapter, you will be able to

1. 1 Describe the alternative methods of allocating scarce resources, and define and explain the features of an efficient allocation.

2. 2 Distinguish between value and price, and define consumer surplus.

3. 3 Distinguish between cost and price, and define producer surplus.

4. 4 Evaluate the efficiency of the alternative methods of allocating resources.

5. 5 Explain the main ideas about fairness, and evaluate the fairness of the alternative methods of allocating scarce resources.

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