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EFFICIENCY AND EQUITY (Resource Allocation Methods (First-Come, First…

- - - - Underproduction
      - Overproduction
  - - - A price regulation ,
        either a price cap or a price floor blocks the price
        adjustments that balance the quantitydemanded
        and the quantity supplied andlead to underproduction.
    - - Taxes increase the prices paid by
        buyers, lower the prices received by sellers, and lead
        to underproduction.
    - - An externality is a cost or a benefit
        that affects someone other than the seller or the
        buyer.
- - - - The nineteenth-century idea that only
        equality brings efficiency is called utilitarianism .