Lesson 18 Flashcards
1
Q
Market failure
A
When economic efficiency
is not achieved
through the system of supply and demand
in a free market economy
2
Q
Demerit good
A
Negative for you and society
overproduced
e.g. cigarettes (have a negative externality of cigarette smoke)
3
Q
Public goods
A
Non-rivalrous
Non-excludable
underproduced
e.g. policing
4
Q
Information failure
A
When consumers or producers do not have perfect information
In a market transcation
Leading to the price mechanism not being utilised efficiently
