Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Economics Micro Theme 1 > 1.3 Market Failiure > Flashcards

1.3 Market Failiure Flashcards

1
Q

What is marginal private benefit?

A

Benefits gained by consumers and producers in a transaction.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is marginal external benefit?

A

Benefits gained by a third party.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What is marginal social benefit?

A

Total benefits to society if the production or consumption of a good.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What is market failure?

A

Any time that the government have to intervene it is a market failure sign ( when there is a misapplication of materials)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are 6 things that can be described as market failure?

A

Negative externality’s
Positive externality’s
Public goods
Information gaps
Abuse of Monopoly money
Inequality

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What is the relation with MPB MEB and MSB?

A

MSB=MPB+MEB

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What is marginal private cost?

A

Costs incurred by the seller and buyer in the transaction.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is marginal external cost?

A

Costs incurred by the third party.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What is marginal social cost?

A

The total costs to society of consumption or production of a good.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is the formula of MPC MEC and MSC?

A

MSC=MEC+MPC

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is a third party?

A

A party that is not part of the transaction.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is consumption externality?

A

Where external cost is created when a product is consumed.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is production externality?

A

Where the external cost is created when a good is produced.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is negative externality?

A

When a good causes external costs to a third party from production or consumption.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What is positive externality?

A

When the consumption or production of a good creates a benefit for the third party.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is ‘non rival’?

A

The consumption of one person does not limit the consumption by others.

17
Q

What is ‘non-excludable’?

A

If a good is available for one person it is available for everyone.

18
Q

What is a quasi public good?

A

When a good has either non rivalry or non excludable..

19
Q

What is the free rider problem?

A

The market will fail as people are unwilling to pay for a product and it won’t be supplied as it isn’t profitable for businesses.

20
Q

What is the difference between symmetric and asymmetric information?

A

Symmetric information is when both the consumer and producer have the same knowledge and information however asymmetric information is when the producer knows more than the consumer.

Economics Micro Theme 1 (4 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions