CH5: Public goods and government failure Flashcards
1
Q
what is demand-side market failure?
A
under allocation of resources that occur when private demand understate consumer willingness to pay for a good or services.
1
Q
what are characteristics of private good?
A
Rival and excludable
2
Q
What are characteristics of private good?
A
rival and excludable
3
Q
What is the free-rider problem?
A
providers won’t achieve for payment for their goods due to excludability.
4
Q
What is cost benefit analysis?
A
method to determine whether or not to provide public good. involves comparison of total cost to total benefit.
