Market Fails Module 4 Flashcards
(10 cards)
The price you pay for iTunes download
Private cost
The benefit your neighbor receives from hearing you play your pleasant music
External benefits
The annoyance of your neighbor because she doesn’t like your achingly conventional music?
External costs
The pleasure you receive from listening to your iTunes download
Private benefits
The price you pay for a security system for your home
Private costs
The safety you enjoy as a result of having the security system
Private benefits
The crime that is more likely to occur to your neighbor once a criminal sees ‘protected by alarm’ sticker on your window
External costs
The extra safety your neighbor might experience because criminals tend to stay away from neighborhoods that have a lot of burglar alarms
External benefits
When we tax goods with external costs, this always creates
A. A price ceiling
B. Deadweight loss
C. Price floor
D. None of the above
Which of the following jobs is attempting to correct for an externality?
A. Tarot card reader
B. Ombudsmen
C. Stock trader
D. Homeowner association (body corporate) ✅ «
