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Chapter 10: Externalities and Market Failures

Chapter 10: Externalities and Market Failures

memorize.aimemorize.ai (lvl 286)
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27 cards
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Section 1

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Positive Production

Front

1 / 27

Haskell
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Last updated

6 years ago

Date created

Mar 1, 2020

Cards (27)

Section 1

(27 cards)

Positive Production

Front

Research and development is a __ __ externality

Back

Positive Consumption

Front

Vaccinations are a __ __ externality.

Back

Positive Production Externality

Front

This happens when there are external benefits from production of a good.

Back

Marginal External Benefit

Front

What is MEB short for?

Back

Positive Consumption Externality

Front

This happens when there are external benefits from the consumption of a good.

Back

Tradeable Permits

Front

These are permits to pollute, issued by a governing body, which sets a maximum amount of pollution allowable. Firms may trade these permits for money.

Back

Internalizing the externality

Front

__ __ __ means altering incentives so that people take account of the external effects of their actions.

Back

cost

Front

The height of the supply curve measures the __ to the marginal producer.

Back

Marginal External Cost

Front

What does MEC stand for?

Back

Coase Therom

Front

This says that people can bargin amongst themselves and reach an efficient solution. If transaction costs are high, however, the government will step in.

Back

Marginal Private Benefit

Front

What is MPB short for?

Back

Command and Control

Front

This type of policy is easy to enforce, but is less efficinent than other solutions.

Back

Negative Consumption Externality

Front

This happens when there are external costs from the consumption of a good.

Back

Cap and Trade System

Front

This is a system under which the government sets a target pollution level for a particular area, and issues just enough permits to meet that target

Back

Negative Consumption

Front

Smoking is a __ __ externality

Back

Transactional Costs

Front

These are the costs that parties incur in the process of agreeing and following through on a bargain.

Back

Social Cost

Front

This is the sum of private costs and external costs

Back

Corrective Tax

Front

The tax on gasoline is an example of a __ because rather than causing deadweight loss, it causes there to be less traffic congestion, safer roads, and a cleaner environments.

Back

Negative Production

Front

Pollution is a __ __ externality.

Back

Marginal Social Benefit

Front

What is MSB short for?

Back

Marginal Benefit

Front

What is MB short for?

Back

value

Front

The height of the demand curve measures the __ of the good to the marginal consumer.

Back

Externality

Front

the uncompensated impact of one person's actions on the well-being of a bystander

Back

Corrective Taxes and Subsidies

Front

This is a solution that taxes negative externalities and subsidizes positive externalities.

Back

Market Failure

Front

Externalities create a __, a situation in which a market left on its own failures to allocate resources efficiently

Back

Negative Production Externality

Front

This happens when there are external costs of production.

Back

Corrective Tax

Front

Also called a pigovian tax, this is a tax enacted to correct the effects of a negative externality.

Back