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Questions and Answers
Market failures occur when selfish consumers do not have to pay producers for benefits.
Market failures occur when selfish consumers do not have to pay producers for benefits.
True (A)
Externalities undermine the social benefits of individual selfishness.
Externalities undermine the social benefits of individual selfishness.
True (A)
Positive externalities are costs that are infeasible to charge to not provide.
Positive externalities are costs that are infeasible to charge to not provide.
False (B)
Negative externalities are benefits that are infeasible to charge to provide.
Negative externalities are benefits that are infeasible to charge to provide.
Market failures occur when selfish producers are not paid.
Market failures occur when selfish producers are not paid.
Flashcards
What are market failures?
What are market failures?
Situations where the market does not efficiently allocate resources due to individual self-interest failing to align with collective well-being.
How do externalities affect social benefits?
How do externalities affect social benefits?
They reduce the overall advantages society gains from individuals acting in their own self-interest.
What are negative externalities?
What are negative externalities?
Costs imposed on others that are not reflected in the market price. Pollution is an example of a classic negative externality.
Market failures and unpaid producers
Market failures and unpaid producers
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