Externalities, merit and demerit goods and public, quasi public and private goods

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  • Created by: Jade
  • Created on: 01-12-12 15:54

1. What are private costs?

  • Private costs are cost which are paid for by society (third party)
  • Private costs are costs which are paid for by an individual economic unit e.g. consumer/firm (first party)
  • Private costs are costs which are paid for by an individual economic unit e.g. consumer/firm (third party)
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2. What are negative externalities?

  • Negative externalities occur when the first parties do not benefit from third party actions.
  • Negative externalities occur when the social costs are greater than the private costs.
  • Negative externalities occur when the private costs are greater than the social costs .

3. If the market does NOT take negative externalities into account the result is that the socially efficient output is ______ than the current output.

  • Less
  • More

4. Public goods - it is difficult, if not impossible, to _____ for them directly.

  • Charge
  • Pay
  • Consume

5. Value judgements often have to made. Usually by government - assumption is made that these organisations know better than individuals what is good or bad for them. Are all?

  • Problems when considering whether certain goods are merit or demerit goods
  • Characteristics neccesary when considering whether a good is merit or demerit.
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Comments

izzy

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very good quiz!

davidsalter

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This 10 question quiz can be used to provide a brief respite from intensive reading and highlight areas for further study.

Alvarodasilva17

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(y) 

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slap my botty

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