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4 Cards in this Set
- Front
- Back
- 3rd side (hint)
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Market failure |
When the outcome of a free market differs from the socially optimal outcome |
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Market equilibrium |
*show equilibrium curve *importance of what ,how and price mechanism * allocation of resources |
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Eg.externalities |
When there cost or benefits to anyone not in control of the transaction or decision making process |
Talking on phone while driving impose cost on other people too.this is a market failure cause too much of this go on. Positive: flu shots. This benefit not only the person getting shot but everyone around them |
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2.public goods |
Services that are underproduced because the don't know who should pay for them in a free market setting. Eg.roads and national defense |
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