Economics - unit 1- definitions list 2
- Created by: Jake Da Floatilla Bird
- Created on: 15-04-13 14:07
26) Free rider problem - the free rider problem affects public goods and results from the fact that individuals avoid paying for goods which are non excludable
27) goods markets- where consumers and firms meet
28) Government failure- when the government intervene to fix market failure, but creates a further misallocation of resources
29) Inferior good - goods for which demand falls as incomes rise
30) market clearing price - The price at which demand and supply are equal
31) market failure- when the price mechanism causes an inefficient allocation of resources
32) Merit good- good which if left to market forces would be under consumed and which has a positive externality
33) A minimum price - is a floor price guaranteed by the government that the price of a product cannot fall below
34) Mixed economy - an economy where the allocation of resources in made partly by the private sector and partly by government
35) National minimum wage - Is the minimum wage which firms are required to pay their workers by law
36) A negative externality are additional costs faced by third parties, which are caused by the production or…
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