Definitions XD Flashcards
1
Q
What are negative externalities
A
Where social costs of an activity are greater than the private costs
2
Q
What are positive externalities
A
Where the social benefits of an activity are greater than private benefits
3
Q
What is a demerit good
A
- Over consumed in the free market
- have negatives externalities from consumption
- There is a lack of information regarding the full private costs
4
Q
What is a merit good
A
- Under consumed in the free market
- Have positive externalities from consumption
- There is a lack of information regarding the full private benefits
5
Q
entrepreneurship
A
The willingness of an entrepreneur to take risks and organise production
6
Q
Scarcity
A
A situation where there are insufficient resource to meet all wants
