Micro 6 Flashcards
1
Q
Government failure
A
When government intervention leads to a net welfare loss in society
2
Q
Maximum price
A
A ceiling price which a firm cannot charge above
3
Q
Minimum price
A
A floor price which a firm cannot charge below
4
Q
Information provision
A
When the government intervenes to provide information to correct market failure
5
Q
Information gaps
A
When an economi agent lacks the information needed to make a rational decision
6
Q
Assymetric information
A
Where one party has more information than the other, leading to market failure
7
Q
Symmetric informaton
A
Where buyers and sellers both have acces to the same information
