T- Meaning of MF

Question 1

What is an externality

Answer 1

The affect to a third party

Question 2

What is social benefit

Answer 2

Total beenfit to society

Question 3

How to calcualte SB

Answer 3

MPB + MXB

Question 4

How do you calculate social cost

Answer 4

MPC + MXC

Question 5

What is social efficiency

Answer 5

When resourxes are utilised in the most efficent way (MSC = MSB)

Question 6

What is a market failiure

Answer 6

When the price mechanism fails to allocate resources efficently

WHen the operation of market forces leads to a net social welfare loss

Question 7

What inefficiencies are there in a MF

Answer 7

Allocative
Productive

Question 8

What is a complete MF

Answer 8

When products are simply not supplied

Question 9

What is a partial market failiure

Answer 9

When the makret does actually function but producuses at wrong price or quantity

Question 10

What is amissing market

Answer 10

The failiure to produce goods and services despite them beign demanded

Question 11

How can MF occur

Answer 11

Public goods
Inequality
Monopoly
Factor immobility
Agriculture
Cyclical Instability
Externalities
Demrit goods

Question 12

Causes of MF

Answer 12

Productive and allocatiev inneffcienc
Monopoly Power
Missing markets (public goods)
Incomplete markets

Question 13

What are incomplete markets

Answer 13

When only asmall amount fo demand is satisfied through elevls fo supply, causing the market to fail to develop fully

Question 14

Talk about property rights and market failiures

Answer 14

When property rights are nto clearly defined, leading to oc of goods etc etc

Question 15

how does ineffcienies cause mf

Answer 15

prices to high

Question 16

how can monopoly power cause mf

Answer 16

undcosnumption fo goods at too high price

Question 17

how do public goods lead to mf

Answer 17

firms have no icnetive to provide good, underconsumed, market failiure

Question 18

how do incomplete markets lead to mf

Answer 18

too much or too little fo a good is produced, at the wrong price

Question 19

acronym to remeber types of mf

Answer 19

PIMMFACED

Question 20

hwo is inqeuqality a type fo MF

Answer 20

due to it being ufnair, people cant get shit

Question 21

how si agriculture a type of MF

Answer 21

Volitile prices on merit goods
Envriomental costs, negative externalities
Monospony power

Question 22

how does cyclical instabiliyt cause mf

Answer 22

high prices due to ifnaltion, etc
leadign to uc of merit goods say

Question 23

How does externalities cause MF

Answer 23

Wont be accoutned for, therefore not geenrated enough, too many generated

Question 24

How do demerit and merit goods cuase MF

Answer 24

people consume to many or too little, due to ifnor failiure, causing prices to be to high, or to low

Question 25

how does factor immobility cause mf

Answer 25

wastage fo scarece resource of workers

Question 26

in general what is the cause of MF

Answer 26

where the wrong level fo a good or service is supplied and consumed, due to the price of it beign to high or to low

Question 27

what is the social optimum level of output

Answer 27

where the cost to society is the same as the benefit to society

Question 28

what is the free market equilibrium

Answer 28

mpb = mpc

Question 29

why is the free market equilibrium at mpc = mpb

Answer 29

lack of accoutn for externaltiies

Question 30

how to calc cost of a subsidy

Answer 30

rectangle made with new equilibrium price, what taht price woudlev been on old supply curve and new price

Question 31

how to determien why a godo woudl cause a mf

Answer 31

look at the good
look at the shit it does, is whataver
link it to pimmfaced

Question 32

explain hwo diesel cars may be seen as a mf

Answer 32

cars = pollution, congestion
pollution adn congestion = negatiev externailites
in a free market cost nto accoutned for
hence too lwo rpice
too high qty
hence mf