Micro
economics
Externalities
Goods
Basic concepts
100
A situation where potential buyers are in contact with potential sellers
What is a market
100
A good where the MSC is higher than the MPC
What is (drugs, alcohol, cigarettes)a good with a negative externality
100

Goods that are Consumed together

What are compliments

100
Land, labour, capital
What are the factors of production
200
The point where demand equals supply
What is the equilibrium / market clearing price
200
A good where the MSB is higher that the MPB and that will be underprovided in a free market
What is a public good
200
A good that is positively related to income
What is a normal good
200
The excess of wants resulting from having limited resources
What is scarcity
300
A condition arising from a situation where social costs and benefits differ from private costs and benefits
What are externalities
300
A consumer that consumes a good without paying for it
What is a free rider
300
A good where quantity demanded falls as income rises
What is an inferior good
300

The study of the last person making a decision in the market

What is "on the margin"

400
The cost of an activity not just to the individual but to the rest of the society as well
What is social cost
400
The consequence of a good having higher MSC than MPC
What is negative externalities
400

A good that is underprovided in a free market(because people are not able to make rational decisions because cost occur today and benefits in many years)

What is a public good

400
The option foregone in making a choice of one alternative over another
What is opportunity cost
500
The benefit to society and not just to the individual
What is social benefit
500
The consequence of a good having higher MSB that MPB
What is positive externalities
500

A good which has a negative income elasticity

What is an inferior good

500
A basic assumption that variables not addressed in the model are kept constant
What is centeris paibus / all else constant / other things being equal
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