ECON 2001.01 Chapter Notes - Chapter Market Failures: Coase Theorem, Social Cost, Free Rider Problem

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beigecod616

13 Sep 2018

School

Ohio State University

Department

Economics

Course

ECON 2001.01

Professor

Jeffrey Buser

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ECON 2001.01 Full Course Notes

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Private market: a market in which the demand and supply curves represent the bene ts and costs to only the consumers and producers in the market. Private marginal cost: the cost to the producer of an additional unit of a good or service. Private marginal bene t: the bene t to the consumer of an additional unit of a good or service. External marginal cost: the cost of an additional unit of a good or service that is enjoyed by people other than the direct consumer of the good or service. Externality: the bene t enjoyed by or cost imposed on a third party not directly involved in the production or consumption of a good or service. Social marginal cost: the cost to society of producing an additional unit of a good or service; the sum of private marginal cost and external marginal cost. Social marginal cost = private marginal cost + external marginal cost.

Related Questions

When a government provides a good with an external benefit, to attain efficiency the price paid by consumers is set equal to the ________.

A. market demand price

B. amount paid by taxpayers

C. marginal private benefit at the efficient level of output

D. marginal private cost at the efficient level of output

Which of the following actions is appropriate in a market with an external benefit?

A. taxes

B. vouchers

C. marketable permits

D. price ceiling

When a person receives a flu vaccination, the ________ is the additional benefit the person receives from getting the shot.

A. marginal private benefit

B. marginal external benefit

C. marginal social benefit

D. marginal social cost

Pell grants given to students attending college are most closely similar to ________.

A. public provision of a good

B. private subsidies are given to producers of a good

C. property rights assigned to consumers of a good

D. vouchers are given to a consumer of a good

Technology that prevents Paul in California from using an email account of Sarah's in Maryland means that email is an example of ________.

A. an excludable good

B. a good that is non-excludable

C. a public good

D. the tragedy of the commons

pucecat409

If the social cost of producing a good or service exceeds the private cost

A. A negative externality exists.

B. The market achiever's economic efficiency.

C. The sum of consumer surplus and producer surplus is maximized.

D. A positive externality exists.

greymouse15

If the social cost of producing a good or service exceeds the private cost

A. a negative externality exists.

B. the market achieves economic efficiency.

C. the sum of consumer surplus and producer surplus is maximized.

D. a positive externality exists.

amethystmanatee669

ECON 2001.01 Chapter Notes - Chapter Market Failures: Coase Theorem, Social Cost, Free Rider Problem

ECON 2001.01 Full Course Notes

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