Chapter 5 Flashcards

1
Q

Externality

A

A benefit or cost that affects someone that is not directly involved

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Private cost

A

The cost borne by the producer

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Social cost

A

The total cost of producing a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Private benefit

A

The benefit received by the consumer of a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Social benefit

A

The total benefit from consuming a good

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Market failure

A

When the market fails to produce efficiency

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Transaction costs

A

Costs that incur in the process of agreeing to and carrying out an exchange of goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Coase theorem

A

If transactions costs are low, private bargaining will result in an efficient solution to the problem of externalities

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Pigovian taxes and subsidies

A

Government taxes and subsidies that brings out efficient level of output

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Private good

A

Rival, excludable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Public good

A

non-rival, nonexcludable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Quasi-public good

A

non-rival, excludable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Common resource

A

rival, nonexcludable

How well did you know this?
1
Not at all
2
3
4
5
Perfectly