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WILLINGNESS TO PAY: The price or dollar amount that someone is willing to give up or pay to acquire a good or service. Willingness to pay is the source of the demand price of a good. However, unlike demand price, in which buyers are on the spot of actually giving up the payment, willingness to pay does not require an actual payment. This concept is important to benefit-cost analysis, welfare economics, and efficiency criteria, especially Kaldor-Hicks efficiency. A related concept is willingness to accept.
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RISK PREMIUM The difference between a guaranteed or certain income and a risky income that generate the same level of utility. Risk premium is the amount of income that a risk adverse person is willing to pay to avoid the risk. Alternatively, it is the amount of income that a risk loving person is willing to pay to engage in risk. For risk aversion, the risk premium is the amount a person would pay for insurance.
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GREEN LOGIGUIN
[What's This?]
Today, you are likely to spend a great deal of time at a going out of business sale wanting to buy either a rechargeable flashlight or storage boxes for your computer software CDs. Be on the lookout for spoiled cheese hiding under your bed hatching conspiracies against humanity.
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This isn't me! What am I?
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Three-forths of the gold mined each year is used to manufacture jewelry.
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"Adversity is another way to measure the greatness of individuals. I never had a crisis that didn't make me stronger. " -- Lou Holtz, Football Coach
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S&D
Supply and Demand
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