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Market Failure Flashcards | StudBud

Explore/Market Failure

Market Failure

10 terms·StudBud Administration·382 plays

#marketfailure #aseconomics #supply #demand

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Questions 10

Answers

1
How can we reduce Market Failure?
All of the above
Giving people better information
Subsidies
Through taxation
2
What is a Merit Good?
Something which causes harmful effects
Something that we under-consume
Something which we over-consume
Something which we should never consume
3
What are subsidies?
A way the government adds money to the price of a good
The government gives producers money so their costs fall
Increasing the price of goods in high demand
Forcing some companies to stop selling demerit goods
4
How are public goods funded?
Subsidies
Legislation
Taxation
Information
5
What is the market equilibrium otherwise known as?
Market clearing price
Excess demand
Where all products are equal
Excess supply
6
What Is a Positive Externality?
Consumption of a good which benefits third parties
Consumption of a good which benefits the individual
Harmful effects on third parties
Harmful effects on the individual
7
What is a monopoly?
Something which is good for consumer welfare
Where a market has many suppliers
Something which we under-consume
Where one supplier dominates the market
8
What is asymmetric information?
Where all parties have the same information
Where one party has more information than the other
Having a bad teacher
A lack of balance between excess supply and excess demand
9
What is a Demerit Good
Expensive goods
Something that tastes good
Something we should consume more
Something which we over-consume
10
What is excess supply
When consumers want to buy more than companies want to sell
When companies want to sell more than consumers want to buy