Ch 11 - Government and Public Sector: Market Failure, Externalities, Public Goods, Efficiency

A(n) ________ occurs here to individuals who are neither consumers nor producers of a product yet are responsible for costs.

When a market experiences a(n) ________, it tends to be producing more a good than is socially desirable.

can be used to calculate inequality.

Can be represented on the graph by the difference between Q2 and Q1.

The quantity produced when ________ is greater than MPC by the market, which implies that there is overproduction in the market.

The graph for income inequality is called ________.

is a form of government intervention which is set by the government to reduce income inequality.

the costs or benefits that affect people ot involved in the production or consumption of a good.

is an example of positive externalities, therefore, if the market were left alone, it will have a greater marginal social benefit than marginal private benefit at the market quantity of production.

A market with ________ occurs when benefit travels to a third party.

are goods which have rivals in consumption and have exclusion.

A(n) ________ tends to be a greater burden on low income earners, which is what makes this tax regressive.

to provide an efficient allocation of resources, and there can be a role for government to intervene and attempt to promote a more desirable social outcome.

A(n) ________ closer to 0 would mean that there is less income inequality, while a number closer to 1 would mean more inequality.

Subsidized goods and benefits will lead to a(n) ________ which creates spillover benefits.

when a market fails to provide an efficient allocation of resources, and there can be a role for government to intervene and attempt to promote a more desirable social outcome

the costs or benefits that affect people ot involved in the production or consumption of a good

are goods which have rivals in consumption and have exclusion

goods which are non-exclusive and non-rivals

results in higher tax rates as income increases

applies the same tax on everyone regardless of their income

the average tax burden decreases as percent of income rises

a payment to producers from the government for each additional unit produced; a solution for positive externalities

a tax on producers for each additional unit produced, adding to the marginal cost of production; a solution for negative externalities