econ 13~15 Flashcards
Public sector
part of economy controlled by the government
State owned enterprise
organization owned by the government which sells products
Privatization
sale of public sector assets to the private sector
Price mechanisim
market forces such as demand & supply that determines prices
Market failure
market forces resulting in an inefficient allocation of resources
Free rider
someone who consumes a good or services with out paying
Allocative efficiency
resources are allocated to produce right products with right quantities
Productivity efficient
products produced in lowest possible price using full amount of resources
Dynamic efficiency
efficiency occurring over time investments and innovation
third parties
not directly involved producing or consuming a product
social benifits
the total benefits to society of an economic activity
social cost
total social cost of an economic activity
private benefits
benefits received by consuming or producing directly
private costs
costs carried by the directly, consuming or producing a product
external costs
costs imposed to the third party from a consumption or producing activity
external benefits
benefits that are applied to the ones who are not involved
social optimum output
level of out put where social cost and benefits equal, and welfare is mximised
merit goods
under consumed products that benefit more than the consumers thoughts. it provides positive externalities, and social benefits
demerit goods
goods that are over consumed not knowing the harmfulness of the product. can cause negative externanlities
public goods
products that are non exclude able from one taking benifit
private goods
products that are exclude able from one taking it
monopoly
a single seller that controls the market
price fixing
two or more firms agree to sell a product at the same price
mixed economic system
where they’re private and public sector playing an important role in he economy
rationing
the limit on that can be consumed
lottery
drawing of tickets to decide who takes the products
nationalisation
ownership of industry changes in to governmental
public corporation
governmental firm designed to act in the public interest
multinational companies
firms where produce in other different countries
