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11 Cards in this Set
- Front
- Back
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1st Fundamental Theorem of Welfare Econ: |
the allocation of resources in a perfectly competitive market will be Pareto efficient |
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'market failures' describes all circumstances where... |
Pareto efficiency is not achieved by the market |
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Externalities: |
costs and benefits incurred by production/consumption that are not borne by producer/consumer |
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Example of externality in healthcare |
Caring externality: altruistic consumption benefit externality |
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Monopoly or imperfect competition means... |
the market will fail |
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Public goods (non-rival and non-excludable) are not provided in a perf comp market beacuse |
no incentive for consumers to pay for them, they will free ride |
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Uncertainty can be addressed by: |
insurance market |
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Imperfect information can lead to |
SID |
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Policy instruments used by the government to intervene: |
direct involvement in finance & provision of health care taxes and subsidies regulation provision of information |
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There many be government failures... |
if intervention does not improve Pareto efficiency and equity |
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There may be inefficiencies in... |
public provision of goods compared to private provision |
