Key Terms Flashcards
What is a Negative Externality?
A harmful effect of economic activity on third parties.
What is a Positive Externality?
A beneficial effect of economic activity on third parties.
What is a Demerit good?
A good which has a negative impact on consumers.
What is a Tax?
A compulsory payment to the government
What is a Subsidy?
An amount of money given to firms by the government to encourage production and consumption.
What is State Provision?
Goods and services provided directly by the government.
What is Legislation?
Laws to control the way people and organisations behave.
What is Regulation?
Rules,directives or government orders to control the way people and organisations behave.
What is Information Provision?
Information is provided by the government to encourage people and organisations to change their behaviour
