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Economic Welfare

Economic welfare refers to the overall well-being and standard of living of individuals in an economy, typically measured by the satisfaction (or utility) people derive from consuming goods and services. It includes both consumer surplus (the benefit consumers receive when they pay less than what they’re willing to) and producer surplus (the benefit producers receive when they sell for more than their minimum acceptable price).

In the UK, economic welfare can be seen in policies like the National Health Service (NHS), which provides free healthcare at the point of use. This increases consumer surplus, as people receive valuable services without direct charges. Similarly, subsidies for renewable energy help lower costs for producers, increasing producer surplus and contributing to long-term sustainability.

Governments aim to improve economic welfare through taxation, spending, and regulation, balancing efficiency with equity. Welfare is not just about income but also access to education, healthcare, and a clean environment.

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