Spillover Sleigh Ride
These represent the external benefits specifically created by producers, such as the North Pole Workshop building an airport that helps the whole community
Positive production externalities
This term refers to situations where buyers and sellers do not have equal access to information, which goes against the assumptions of a competitive market
Assymetric information
While income is money earned, _________ refers to the things of value that people own, such as jewelry, property, or stocks
wealth
To correct a positive externality, the government may provide a ____________ to a firm for every unit of a good produced
subsidy
What did the other reindeer not let Rudolph do because of his shiny red nose?
Join in any reindeer games
These are goods, like holiday health check-ups or education, that are held to be desirable for consumers but are typically underprovided by the market
merit goods
This specific type of asymmetry occurs when a seller has more information about product quality than the buyer, such as a used-car dealer hiding a vehicle's history
Adverse selection
This term describes a society where everyone receives the same amount of income
income equality (socialism)
This government response involves passing laws like ____________, which requires professionals like doctors and teachers to have permits to perform their duties
licensure
Which popular beverage is also called “milk punch?”
egg nog
When the free market _______________ resources to a merit good, it is because consumers are often ignorant of the benefits or simply cannot afford them.
underallocates
In the market for health insurance, this party usually possesses more information about the actual state of their health than the insurance provider
consumer
This specific model demonstrates that the distribution of income depends on what factors of production households own and the prices they sell them for
circular flow model
This private response is used by the party with more information to convince a buyer of quality, often through warranties or brand names
Signalling
Elvis isn’t going to have a white Christmas, he’s going to have a….
Blue christmas
This is the name for the shaded triangle on a supply and demand graph that shows the loss to society when a market fails to reach the social optimal point
Welfare loss
This occurs when an individual takes a risk but does not face the full costs because those costs are borne by another party, like an insurance company
moral hazard
some people receive low wages because they are: ______________, while others receive high wages for having: ________________.
low skills, high skills
This is a method used by the party with limited information to gain facts, such as using the internet to research a product before buying
screening
In the classic Christmas movie, How The Grinch Stole Christmas, the Grinch was described with three words. What are they?
Stink,stank,stunk
Even if you never visit a new public park, you can still experience these types of ripple effects, such as improved community well-being or local environmental benefits
Positive externalities
The competitive market mechanism assumes that all firms and consumers have this level of information, which rarely exists in reality
Complete information
It is possible for an economy to have allocative efficiency (where MSB = MSC) while also having:
income/wealth inequality
One major difficulty in using government revenue to fix externalities is that it is very hard to measure the:
size of the external benefit
In the movie, It’s A Wonderful Life, what happened every time a bell rang?
An angel got his wings