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14 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Externality |
The uncompensated impact of one person's actions on the well-being of a bystander |
Uncompensated impact ; bystander |
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Front (Term) Internalizing of externality |
Back (Definition) Altering incentives so that people take account for the external effects of their actions |
Altering incentives ; people take account ; ee |
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Front (Term) Coase theorem |
Back (Definition) The proposition that if private parties can bargain without cost of the allocation of resources, they can solve the problem of externalities on their own. |
Proposition ; pp ; allocation ; resources ; solve alone |
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Transaction costs |
The costs that parties incur in the process of agreeing & following through on a bargain |
Parties incur ; agree & follow through |
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Corrective tax |
Tax designed to induce private decision makers to take account of social costs that arise from negative externalities |
Induce PDM ; social costs ; negative externalities |
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Excludability |
The property of a good whereby a person can be prevented from using it |
Property of a good... ; you can use it doe |
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Rivalry in consumption |
The property of a good whereby one person's use diminishes other people's use |
Diminishes |
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Private goods |
Goods that are both excludable & rival in consumption |
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Private goods |
Goods that are both excludable & rival in consumption |
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Public goods |
Goods that are neither excludable nor rival in consumption |
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Common resources |
Goods that are rival in consumption but not excludable |
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Free rider |
A person who receives the benefit of a good but avoids paying for it |
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Cost-benefit analysis |
A study that compares the costs & benefits to society |
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Tragedy of the Commons |
A parable that illustrates why common resources get used more than is desirable from the standpoint of society as a whole. |
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