Market failure Flashcards
Asymmetric information
When buyers and sellers have different amounts of information
Free rider problem
when benefits are received by parties who have made no contribution as other parties have paid for it
Non Reject-ability
Once provided it is impossible for an economic agent to reject it eg nuclear defence system
Non -excludability
provisions of service makes it impossible for any other economic agnate to avoid consuming/using eg street lamps
Non -Rivalry
Consumption by one economic agent does not reduce the amount for another eg roads
Private goods
possesses the characteristics of excludability and rivalry
Symmetric information
When buyers and sellers have access to the same amount of information of a good or service
Market failure
the inefficient allocation of resources in a free market economy
