corrections Flashcards
Information failure
A lack of information resulting in consumers and producers making decisions that do not maximise welfare
Merit goods
These have more private benefits than their consumers actually realise
Demerit goods
Their consumption is more harmful than is actually realised
Public goods
Goods that are collectively consumed and have the characteristics of non excludability and non rivalry
Free rider
Someone who directly benefits from the consumption of a public good but who does not contribute towards its provision
Quasi-public good
Goods having some but not all of the characteristics of a public good
Direct tax
One that taxes tge income of people and firms that cannot be avoided
Indirect tax
A tax levied on goods and services
Incidence of taxation
The division of a tax burden between buyers and sellers
Subsidy
A payment usually fromgovernment to encourage production or consumption
Regulation
A control used by the government to modify economic and social behaviour
Tradeable permit
A permit that allows the owner to emit a certain amount of pollution and that if unused or only partially used can be sold to another polluter
Information provision
The supply of information resulting in consumers and producers making decisions that maximise welfare
