How important are L2 and L3 cache in a CPU?

[ThePcGamer]

I'm not even really sure what L2 & L3 cache are. All I know is it improves cpu performance.

I'll give an example for what I'm asking:

The AMD A8-3870k - A quad-core at 3.0Ghz, 4MB L2 cache and I couldn't find anything on the L3 cache.

The AMD FX-8120 Processor - A dual-core at 3.1Ghz, 8 MB L2 cache, and 8MB L3 cache

The Dual-core processor is $130 more than the quad-core CPU from the website that I saw it on. Is this due to the amount of L2 & L3 cache? Also, is it actually better than the quad-core? I'm pretty sure 100Mhz doesn't beat two additional cores, so that's why I'm assuming it's the amount of L2 & L3 cache.
Or, did the website just give a higher price for the worse CPU and make a ridiculous mistake?

 

[OhSnapWord]

What web site is this on? The FX-8120 is an octa-core CPU.

 

[Der-PC-Mann]

Hate to admit it, but I'm the same. >.< I'm fully aware that L2 and L3 cache improve performance, especially when the amount of cache is high, but, to this day, I still don't know WHY. Might be worth simply searching on Wiki for "CPU" and jumping straight to the cache area, if there is one.