Government Intervention
What is a tax used to reduce negative externalities called?
Pigovian Tax
The inability of a market to allocate resources efficiently on its own.
What is market failure?
I'm the type of cost not paid by you, yet others suffer from what you do. I'm smoke in the sky or noise in the air- unseen, unfelt, but still unfair.
What am I?
Negative Externality
What government policy helps increase the consumption of positive externalities?
Subsidies
A good that is non-excludable and non-rivalrous.
What is a public good?
I'm a Product for all, used near and far, But you can't be stopped , no matter who you are. Since no one pays, I'm in short supply-yet without me, People may cry.
What am I?
Public Good
What type of regulation might a government use to control pollution levels?
Environmental regulation
When the actions of consumers or producers affect third parties.
What is an externality?
You know more than me when we make a deal, so i might get hurt-that's a raw deal. Health insurance or a used car too- I'm the hidden truth that can fool you.
What am I?
Asymmetric Information
How do price ceilings cause market inefficiencies?
They lead to shortages and reduced quality of goods.
A market situation where one party has more or better information than the other.
What is asymmetric information?
One seller rules, no rivals in sight,
They set the price high, and that’s not right.
With fewer choices and little say,
Consumers lose out every day.
What am I?
Monopoly