Term
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Definition
| a legally established maximum price a seller can charge |
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Term
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Definition
| a legally established minimum price a seller can be paid |
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Term
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Definition
| a situation in which market equilibrium results in too few or too many resources used in the production of a good or service. This inefficiency may justify government intervention |
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Term
| four cases of market failure |
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Definition
lack of competition can cause wasted resources and no improvements in technology
externality-a cost or benefit imposed on people other than the consumers and producers of a good or service aka side effects, spillover effects or neighborhood effects and people effected called third parties
public goods
income inequality |
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Term
| what happens when the supply curve fails to include external costs? |
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Definition
| the equilibrium price is artificially low and the equilibrium quantity artificially high |
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Term
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Definition
a good or service with two properties
1) users collectively consume benefits
2) there is no way to bar people who do not pay (free riders) from consuming the good or service |
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