Distribution Of Income And Wealth, Poverty And Inequality Part 2 Flashcards
Give an example of a private food?
Consumption of a chocolate bar
Private property
What is a newer factor that can effect wether a good is public of private?
Give an example?
Technological changes
TV broadcasting used to be more like a public good but now advances in technology mean that it can be excludable
What does the tragedy of the commons mean?
This refers to how individuals proprieties personal gain over the well being of society
What phrase refers to how individuals proprieties personal gain over the well being of society?
The tragedy of the commons
What does it mean for resources to be held in common?
It means that no one owns the resource but everyone can access it
Give an example of a market failure that is from a result from common access?
Air pollution (because no one owns the air but everyone has access to it)
What is an externality (in other words)?
The spill over effect of production or consumption of a good or service
What do demerit good do?
Give out negative externalities
Why do demerit good give out negative externalities?
Information failure
Consumers aren’t fully aware of the long term consequences of consumption and they are usually over provided
Give an example of a demerit good?
Give an example of the negative externality
Cigarette - second had smoke , alcohol - effects of drunk people
Positive externalities are caused by merit goods
Are merit goods or demerit goods associated with information failure?
Why?
Both
Demerit - lack of inform about long term impacts
Merit - consumers don’t realise the positive impacts
Why are merit goods often under provided?
Consumers don’t consume enough as they don’t realise the full benefits to them selves society
May be more reasons
Give an example of a merit good?
What is the positive externality?
Education - a higher skilled workforce and healthcare
What do negative externalities often cause?
Market failure
How do you show external costs on a diagram?
