Deadweight Loss: Deadweight loss occurs when there is an inefficient allocation of resources in a market, leading to a loss of economic efficiency. It represents the value that could have been gained but was lost due to inefficiency.
Opportunity Cost: Opportunity cost refers to the value of the next best alternative foregone when making a decision. It highlights the trade-offs involved in allocating scarce resources and helps determine whether an action is efficient or not.
Externalities: Externalities are costs or benefits that arise from economic activities but are not reflected in market prices. They can lead to inefficiencies because individuals do not consider these external effects when making decisions.