Micro 4 Flashcards
1
Q
Negative externalities of production
A
Where the social costs of producing a good are greater than the private costs of producing the good
2
Q
Trade pollution permits
A
Licenses which allow firms to pollute up to a certain amount. These permits can be bought and sold
3
Q
Regulation
A
Laws to address market failure and promote competition between firms
4
Q
Positive externalities of consumption
A
When the social benefits of consuming a good are larger than the private benefits of consuming that good.
5
Q
Free rider problem
A
People who do not pay for a public good still recieve benefits of that good.
