Karteikarten
Part 1.6: Revisiting market failure and government intervention in markets
Karten in diesem Stapel (33)
- 1Market failureOccurs when the price mechanism fails to allocate scarce resources in a productively efficient way and when the operation of market forces leads to an allocatively inefficient outcome.
- 2Complete market failureA market fails to function at all and a missing market results.
- 3Partial market failureA market does function, but it delivers the wrong quantity of a good or service, which results in resource misallocation.
- 4Missing marketThe absence of a market for a good or service, most commonly in the case of public goods and externalities.
- 5Private goodA good which exhibits the characteristics of excludability and rivalry.
- 6Property rightsThe exclusive authority to determine how a resource is used. In the case of a private property right, the owner of private property has the right to prevent other people from consuming an item unless they are prepared to pay a price to the owner.
- 7Public goodA good which exhibits the characteristics of non-excludability and non-rivalry.
- 8Non-excludabilityA property of a public good which means that if it is provided for one person it is provided for all.
- 9Non-rivalryA property of a public good which means that when a good is consumed by one person, it does not reduce the amount available for others.
- 10Non-rejectabilityA property of a public good which means that if the good is provided, it is impossible for a person to opt out and not gain its benefits.
- 11Free-rider problemOccurs when non-excludability leads to a situation in which not enough customers choose to pay for a good, with the result that the incentive to produce the good through the market disappears and a missing market may result.
- 12Quasi-public goodA good which has characteristics of both a public and a private good.
- 13ExternalityOccurs when production or consumption of goods or services imposes external costs or benefits on third parties outside of the market, without this being reflected in price. Divergence between private and social costs and benefits.
- 14Negative externalityA cost that is suffered by a third party as a result of an economic transaction. Pollution is a negative externality when unwillingly consumed by third parties.
- 15Positive externalityA benefit that is enjoyed by a third party as a result of an economic transaction.
- 16Production externalityWhen production of a good or a services imposes external costs or benefits on third parties outside the market without these being reflected in market prices.
- 17Consumption externalityWhen consumption of a good or a service imposes external costs or benefits on third parties outside the market without these being reflected in market prices.
- 18Demerit goodA good for which the private benefits of consumption are greater than the social benefits and for which the long-term private benefits are less than the short-term benefits.
- 19Merit goodA good for which the social benefits of consumption exceed the private benefits and for which the long-term private benefits of consumption are greater than the short-term benefits.
- 20Moral hazardThe tendency of individuals and firms, once insured against some contingency, to behave so as to make that contingency more likely.
- 21Adverse selectionA situation in which people who buy insurance often have a better idea of the risks they face than do the sellers of insurance. People who know they face large risks are more likely to buy insurance than those with small risks.
- 22Government failureOccurs when government intervention in the economy makes the allocation of resources worse. The intervention may be ineffective, wasteful or damaging.
- 23Competition policyThe part of the government's microeconomic policy and industrial policy which aims to make goods markets more competitive. It comprises policy towards monopoly, mergers and restrictive trading practices.
- 24Competition and Markets AuthorityThe government agency responsible for advising on and implementing UK competition policy.
- 25Public ownershipOwnership of industries, firms and other assets such as social housing by central government or local government. The state's acquisition of such assets is called nationalisation.
- 26PrivatisationThe transfer of assets from the public sector to the private sector.
- 27ContractualisationServices which were previously provided by the public sector, such as refuse collection, are put to private sector tender and then provided by private sector firms.
- 28MarketisationThe provision of goods and service is shifted from the non-market sector into the market sector of the economy. AKA commercialisation.
- 29Public-private partnershipPartnership between the private and public sectors to provide public services.
- 30Private finance initiativeThe government seeks tenders from the private sector for designing, building, financing and running infrastructure projects.
- 31RegulationThe imposition of rules and other constraints which restrict freedom of economic action.
- 32DeregulationThe removal of previously imposed regulations.
- 33Regulatory captureOccurs when regulatory agencies act in the interest of regulated firms rather than on behalf of the consumers they are supposed to protect.
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- Beschreibung
- A2 Economics Karteikarten am Part 1.6: Revisiting market failure and government intervention in markets, erstellt von Alex Maas am 01/03/2017.
- Erstellt von
- Alex Maas
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