Economics Welfare Economics Study Cards

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Welfare Economics

A branch of economics that focuses on the optimal allocation of resources and the distribution of goods and services to maximize social welfare.

Economic Welfare

The well-being and satisfaction derived from the consumption of goods and services, taking into account both individual and societal preferences.

Redistribution of Wealth

The transfer of income and wealth from the rich to the poor through taxation, social welfare programs, and other government policies.

Market Failures

Situation where the allocation of goods and services by a free market is not efficient, leading to a suboptimal outcome for society.

Public Goods

Goods or services that are non-excludable and non-rivalrous, meaning they are available to all and consumption by one individual does not reduce availability for others.

Externalities

Costs or benefits that are not reflected in the market price of a good or service, resulting in an inefficient allocation of resources.

Income Inequality

The unequal distribution of income among individuals or households in an economy, often measured by the Gini coefficient.

Poverty and Social Welfare

The study of poverty and the policies and programs aimed at improving the well-being of the poor and vulnerable members of society.

Government Intervention

Actions taken by the government to influence or regulate economic activities, often aimed at correcting market failures and promoting social welfare.

Efficiency and Equity

The trade-off between economic efficiency, which maximizes total societal welfare, and equity, which focuses on fairness and the distribution of resources.

Cost-Benefit Analysis

A systematic approach to evaluating the costs and benefits of a project or policy, often used to determine its economic feasibility and desirability.

Welfare Economics Theories

Different economic theories and models that aim to analyze and improve social welfare, such as utilitarianism, Rawlsian justice, and Pareto efficiency.

Welfare Economics Policies

Government policies and interventions designed to improve social welfare, such as income redistribution, social safety nets, and progressive taxation.

International Trade and Welfare

The study of how international trade affects the economic welfare of countries, including gains from trade, trade barriers, and trade agreements.

Market Equilibrium

The state of a market where the quantity demanded by buyers equals the quantity supplied by sellers, resulting in an efficient allocation of resources.

Pareto Efficiency

A state of allocation where it is impossible to make any individual better off without making at least one individual worse off.

Social Welfare Function

A mathematical function that aggregates individual preferences to determine the overall social welfare or utility of a society.

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium quantity of a good or service is not produced or consumed due to market distortions.

Progressive Taxation

A tax system where the tax rate increases as the taxable income or wealth of an individual or corporation increases, aiming to reduce income inequality.

Utilitarianism

An ethical theory that promotes actions that maximize overall happiness or utility for the greatest number of people.

Rawlsian Justice

A theory of justice that emphasizes fairness and equality, particularly in the distribution of resources and opportunities.

Gini Coefficient

A measure of income inequality within a population, ranging from 0 (perfect equality) to 1 (perfect inequality).

Social Safety Nets

Government programs and policies that provide financial assistance and support to individuals and families facing economic hardship or vulnerability.

Trade Barriers

Obstacles or restrictions imposed by governments to limit or control the flow of goods and services across national borders, such as tariffs and quotas.

Trade Agreements

Bilateral or multilateral agreements between countries to reduce trade barriers and promote economic cooperation, such as free trade agreements.

Economic Efficiency

The optimal allocation of resources to maximize the production of goods and services, resulting in the highest possible level of economic welfare.

Fairness

The quality of being just, equitable, or impartial, often considered in the context of resource distribution and social welfare.

Market Distortions

Factors or conditions that prevent a market from reaching equilibrium and result in an inefficient allocation of resources, such as monopolies or externalities.

Social Justice

The concept of fairness and equality in the distribution of resources and opportunities, often considered in the context of social welfare and public policy.

Economic Inequality

The unequal distribution of economic resources and opportunities among individuals or groups in a society.

Economic Development

The process by which a nation improves the economic, political, and social well-being of its people, often measured by indicators such as GDP per capita and HDI.

Poverty Alleviation

Efforts and policies aimed at reducing or eliminating poverty, often through income redistribution, social programs, and economic empowerment.

Inequality of Opportunity

The unequal distribution of opportunities for education, employment, and social mobility, often influenced by factors such as race, gender, and socioeconomic status.

Economic Growth

An increase in the production and consumption of goods and services in an economy over time, often measured by changes in real GDP.

Social Mobility

The ability of individuals or families to move up or down the social and economic ladder within a society, often influenced by factors such as education and income.

Market Forces

The economic factors and mechanisms that determine the prices, quantities, and allocation of goods and services in a market economy, such as supply and demand.

Economic Policy

Government actions and interventions aimed at influencing or regulating the economy, often to achieve specific economic objectives or address market failures.

Income Redistribution

The transfer of income from higher-income individuals or groups to lower-income individuals or groups through taxation and social welfare programs.

Equitable Distribution

The fair and just allocation of resources, opportunities, and benefits among individuals or groups in a society.

Market Mechanism

The process by which the forces of supply and demand determine the prices, quantities, and allocation of goods and services in a market economy.

Social Welfare

The well-being and quality of life of individuals or groups in a society, often influenced by factors such as income, education, healthcare, and social support.

Economic Incentives

Rewards or penalties that encourage or discourage certain economic behaviors, often used to influence the allocation of resources and promote economic efficiency.

Market Failure

A situation where the allocation of goods and services by a free market is not efficient, leading to a suboptimal outcome for society.

Public Policy

Government actions and decisions aimed at addressing public issues and promoting the well-being of society as a whole, often through laws, regulations, and programs.

Economic Externalities

Costs or benefits that are not reflected in the market price of a good or service, resulting in an inefficient allocation of resources and potential market failures.

Economic Indicators

Statistics and data that provide insights into the overall health and performance of an economy, such as GDP, inflation rate, unemployment rate, and trade balance.

Economic Systems

The structure and organization of an economy, including the institutions, policies, and mechanisms that determine how resources are allocated and goods and services are produced and distributed.

Economic Recession

A period of significant decline in economic activity, often characterized by a contraction in GDP, high unemployment, and reduced consumer spending.

Economic Inflation

A sustained increase in the general price level of goods and services in an economy over time, resulting in a decrease in the purchasing power of money.

Economic Deflation

A sustained decrease in the general price level of goods and services in an economy over time, resulting in an increase in the purchasing power of money.

Economic Stagnation

A prolonged period of slow or no economic growth, often characterized by high unemployment, low productivity, and limited investment and innovation.

Economic Boom

A period of rapid economic growth and expansion, often characterized by high levels of investment, consumer spending, and business activity.

Economic Downturn

A period of economic decline or contraction, often characterized by a decrease in GDP, rising unemployment, and reduced business activity.

Economic Recovery

A period of economic growth and improvement following a recession or downturn, often characterized by increasing GDP, declining unemployment, and rising consumer confidence.

Economic Forecasting

The process of predicting or estimating future economic trends and developments, often based on historical data, statistical models, and expert analysis.

Economic Planning

The process of setting goals, formulating strategies, and implementing policies to guide and manage the economic development and performance of a nation or organization.