Final answer:
The branch of economics that measures the welfare of market participants and assesses how market changes influence their well-being is known as welfare economics. It addresses the impact of economic decisions and externalities like environmental pollution on the broader society's well-being. Welfare economics examines production, consumption, policies, and their effects on social welfare.
Step-by-step explanation:
The branch of economics that focuses on measuring the welfare of market participants and the impact of market changes on their well-being is known as welfare economics. Welfare economics is a subsection of economics that analyzes the economic processes and policies that affect the prosperity of individuals in a market economy.
It incorporates issues like how government spending, taxes, and regulations affect decisions about production and consumption, as well as the ways big businesses and labor unions may impact social welfare. This branch acknowledges that while the production of goods and services is essential, it can also lead to environmental pollution and other externalities.
Economics as a whole is concerned with the well-being of all societal members, incorporating considerations about jobs, income levels, and education, as well as the broader impact of economic activity on society. By exploring these complex relationships, welfare economics seeks to understand and improve the collective well-being.