Chapter 13 Flashcards

1
Q

Positive extranlities

A

Benefits third party from market transaction

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2
Q

Private benefits

A

Person benefits from consuming a good or service

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3
Q

Rates of return

A

Estimated rates of return go to an individual

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4
Q

Public good

A

Good or service that is a non rival and none excludable

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5
Q

Social benefits

A

Sum of private benefits and external benefits

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6
Q

Social rate of return

A

When estimated rates of return go to society

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7
Q

External benefits

A

A beneficial spill over to a third party who did not pay for the good or service

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8
Q

Free rider

A

A person who uses a public good or service who does not pay for it

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9
Q

Intellectual property

A

Law that protects inventors to produce and sell inventions

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10
Q

Nonexcludable

A

Good or service is impossible to exclude a person from using the good or service and is hard to charge for the good

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11
Q

Non rivalrous

A

One person uses a good and other people can too

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12
Q

Rival

A

One person uses it and others can not use it

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13
Q

Market failure

A

Production of too few products or services with positive externalities

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