Briefly Identify the Two Types of Inequity

question 82

Essay

Briefly identify the two types of inequity. What are the accompanying psychological reactions of the person perceiving each type of inequity?

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Definitions:

Deadweight Loss

A loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved.

Under Production

A situation where less is produced than could be achieved with the available resources, often leading to inefficiencies and unmet demand.

Consumer Surplus

The gap between the price consumers are prepared to pay for a product or service and the actual amount they spend on it.

Market Price

The market rate for buying or selling an asset or service in a public trading environment.