failure Flashcards
1
Q
market failure
A
market failure is the failure of the free-market system to achieve efficient allocation of resources that maximises society’s welfare
2
Q
productive efficiency
A
lowest attainable cost for producing any given level of output, assuming constant technology
3
Q
marginal private costs
A
costs to producers of producing one more unit of good/service
4
Q
marginal external costs
A
costs imposed on 3rd parties of producing/ consuming one more unit of good/ service
5
Q
marginal social costs
A
costs to society of producing one more unit of good/ service
6
Q
marginal private benefits
A
gains in satisfaction to consumers from consuming one more unit of good/ service
7
Q
marginal external benefit
A
benefits enjoyed by 3rd parties of producing/ consuming one more unit of good/ service
8
Q
A
