Term
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Definition
| The difference between total revenue and total cost. |
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Term
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Definition
| The total benefit of the activity minus its opportunity cost. |
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Term
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Definition
| The amount by which an additional unit of an activity increases its total benefit. |
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Term
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Definition
| The amount by which an additional unit of an activity increases its total cost. |
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Term
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Definition
| If the marginal benefit of an additional unit of an activity exceeds the marginal cost, the quantity of the activity should be increased. If the marginal benefit is less than the marginal cost, the quantity should be reduced. |
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Term
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Definition
| A boundary that limits the range of choices that can be made. |
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Term
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Definition
| The loss in net benefits resulting from a failure to carry out an activity at the efficient level. |
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Term
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Definition
| The allocation of net resources when the net benefits of all economic activities are maximized. |
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Term
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Definition
| A set of rules that specify the ways in which an owner can use a resource. |
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Term
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Definition
| A property right that allows its owner to prevent others from using the resource. |
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Term
| Transferable Property Right |
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Definition
| A property right that allows the owner of a resource to sell or lease it to someone else. |
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Term
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Definition
| A situation that requires a competitive market with well-defined and transferable property rights. |
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Term
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Definition
| The amount by which the total benefits to consumers from consuming a good exceed their total expenditures on the good. |
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Term
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Definition
| The difference between the total revenue received by sellers and their total cost |
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Term
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Definition
| The failure of private decisions in the marketplace to achieve an efficient allocation of scarce resources. |
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Term
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Definition
| A good for which the cost of exclusion is prohibitive and for which the marginal cost of an additional user is zero. |
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Term
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Definition
| A good for which exclusion is possible and for which the marginal cost of another user is positive. |
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Term
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Definition
| People or firms that consume a public good without paying for it. |
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Term
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Definition
| A cost imposed on others outside of any market exchange. |
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Term
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Definition
| An action taken by a person or firm can also create benefits for others, again in the absence of any market agreement. |
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Term
| Common Property Resources |
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Definition
| Resources for which no property rights have been defined. |
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