such as welfare payments intended to redistribute income. In economic models, transfer payments are normally treated as a negative component of "taxes net of transfers", leaving "government spending on (newly produced) goods and services" as a separate category, often referred to simply as "government spending". In everyday usage, "government spending" refers to the broader concept of government spending on goods and services plus transfer payments. "Welfare economics" Welfare economics is a branch of economics that uses microeconomic techniques to evaluate economic well-being, especially relative to competitive general equilibrium, with a focus on economic efficiency and income distribution. In general usage, including by economists outside the above context, welfare refers to a form of transfer payment. "Efficient" Economists use the word efficient to mean any of several closely related things: No one can be made better off without making someone else worse off (Pareto efficiency). More output cannot be obtained without increasing the amount of inputs. Production proceeds at the lowest possible per-unit cost. All of these definitions involve the idea that nothing more can be achieved given the resources available. In popular usage, efficient often has the similar but less precise meaning "functioning effectively". "Cost" and "profit" The economics term cost, also known as economic cost or opportunity cost, refers to the potential gain that is lost by foregoing one opportunity in order to take advantage of another. The lost potential gain is the cost of the opportunity that is accepted. Sometimes this cost is explicit: for example, if a firm pays $100 for a machine, its cost is $100. Other times, however, the cost is implicit: for example, if a firm diverts resources from producing output worth $200 into producing a different kind of output, then regardless of how much or how little of the latter output is produced, the opportunity cost of doing so is $200. In accounting, there is a different technical concept of cost, which excludes implicit opportunity costs. In common usage, as in accounting usage, cost typically does not refer to implicit costs and instead only refers to direct monetary costs. The economics term profit relies on the economic meaning of the term for cost. While in common usage, profit refers to earnings minus accounting cost, economists mean earnings minus economic cost or opportunity cost. "Demand" In economics, demand refers to the strength of one or many consumers' willingness to purchase a good or goods