How markets fail Flashcards
Monopoly
When a market only focuses on one firm
Merit goods
Goods and services that the government feels that people will under-consume
Public goods
Non-rival and non - excludable
De merit goods
Over provided by the market, e.g cigarettes
Asymmetric information
Where information is incorrect
Inequality
Difference between highest and lowest income
Positive externality
Benefits a third party
Negative externality
cost that is suffered by a third party
Immobility
Difficulty to move jobs because of location
Quasi- public goods
Consumers can be stopped from using a product that is normally free
Externality
Unintended consequence on a third party
Geographical immobility of labour
Can’t get workers to move from one place to another easily
Poverty trap
Stay on benefits, no point working
Private goods
Rival and excludable
