Micro 12 Flashcards
1
Q
Market failure definition?
A
Scenario where the operation of market forces lead to a net social welfare loss
2
Q
Indirect tax?
A
Tax imposed by the government on producers
3
Q
Subsidy?
A
Government intervention which involves payment to reduce marginal costs for output
4
Q
Government failure?
A
When government jntervention inteneded to fix market failure leads to a greater missalocation of resources
