Market Failure Flashcards
1
Q
Market failure
A
Imperfect information
2
Q
How do governments try to reduce consumption of demerit goods
A
Legislation and taxation
3
Q
Asymmetric information
A
Type of market failure exists when the individual or party has much more information than another individual or party and uses that to exploit the other party
4
Q
Symmetrical information
A
Both have same information
5
Q
Two types of market failure
A
Imperfect information public goods
6
Q
What can cause imperfect information
A
Misunderstanding true benefits or costs of a product
Complex info
Addiction
lack of awareness
7
Q
Why are consumers irrational
A
Lack of availability
Imperfect information
Present bias short term
