Microeconomic Definitions 0.0 / 5 ? EconomicsDefinitionsASAQA Created by: RadiyahCreated on: 11-05-14 17:21 Opportunity cost The next best alternative forgone 1 of 8 Subsidy When part of the cost of productions is paid by the government to increase supply 2 of 8 Merit good A good that is underproduced in a free market 3 of 8 Demerit good A good that is overproduced in a free market 4 of 8 Negative externalities Costs inflicted on a third party not involved in the consumption or production of the good, when MSC exceeds MPC 5 of 8 Positive externalities Benefits inflicted on a third party, when MSB exceeds MPB 6 of 8 Government failure When governments intervene when there is market failure but end up with a net welfare loss 7 of 8 Market failure When left to the free market there is a misallacation of resources 8 of 8
Comments
No comments have yet been made