Here is a short matching terms quiz on aspects of market failure. Who can come top of the leaderboard?
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Here are some key market failure terms to revise
Asymmetric information - Occurs when somebody knows more than somebody else in the market.
Deadweight loss - Loss in producer and consumer surplus due to an inefficient level of production
Externalities - Third party effects arising from production and consumption for which no appropriate compensation is paid
Occupational immobility - Barriers to moving easily between jobs
Free-rider problem - When people have no incentive to reveal how much they are willing and able to pay for a public good because they can enjoy a benefit without paying
Market power - Ability of a firm to influence or control the terms and condition on which goods are bought and sold.
Merit good - A product that society values and judges that everyone should have regardless of whether an individual wants them.
Public goods - Goods that are are non-rival and non-excludable
Unintended consequences - Outcomes that are not the ones foreseen and intended by a purposeful action
Spillovers - External effects of economic activity, which have an impact on outsiders who are not producing or consuming a product
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