5.2 Micro Flashcards
1
Q
Misallocation of resources can be because of what?
A
Public goods
Externalities
Merit and demerit goods
2
Q
What is inefficiency use of scarce resources because of?
A
Monopoly power
Other market imperfections
Inequalities in the distribution of income and wealth
3
Q
What is partial market failure?
A
A market exists but there’s a misallocation of resources
Goods and services will be supplied but at the wrong amounts
4
Q
What is complete market failure?
A
When free markets fail to create a market for a good or service
