Introduction to Public Policy Analysis

These flashcards cover key definitions and concepts from the Introduction to Public Policy Analysis lecture to aid in exam preparation.

Public Policy

Actions taken by public officials that impact society.

Public Official

A person with authority conferred by the state, typically paid by taxpayers and part of a government agency.

Laissez-Faire

A policy of minimum governmental interference in the economic affairs of individuals and society.

Economic Transaction

Any exchange of goods, services, information, or currency between parties.

Market

A place where two or more parties can meet to engage in an economic transaction.

Scarcity of Skill

A factor that determines an individual's income based on the availability of skilled labor.

Social Welfare

Programs and policies designed to improve the well-being of individuals in society.

Government Intervention

The act of having the government take an active role in the economy or society to implement policies.

Income Level

The measure of an individual's earnings, which can affect their purchasing decisions.

Cumulative Score

The total score calculated from various assessments, including exams and quizzes.

Public Goods

Goods that are non-excludable and non-rivalrous.

Private Goods

Goods that are excludable and rivalrous.

Common Goods

Goods that are non-excludable but rivalrous (e.g., fisheries, clean air).

Club Goods

Goods that are excludable but non-rivalrous (e.g., pay-per-view movies, gyms).

Pure Public Good

A good that exhibits perfect non-excludability and non-rivalry in consumption.

Excludable

The characteristic of a good where it is possible to prevent consumption by those who do not pay for it.

Non-Excludable

The characteristic of a good where it is not possible to prevent consumption by those who do not pay for it.

Rivalrous

The characteristic of a good where its consumption by one person prevents or diminishes its consumption by another.

Non-Rivalrous

The characteristic of a good where its consumption by one person does not prevent or diminish its consumption by another.

Free Rider

An individual who benefits from a good or service without contributing to its cost.

Externalities

The costs or benefits of an economic transaction that are borne by or accrue to third parties not directly involved in the transaction.

Positive Externalities

Benefits experienced by a third party as a result of an economic transaction they are not directly involved in.

Negative Externalities

Costs imposed on a third party as a result of an economic transaction they are not directly involved in.

Social Cost

The total cost to society from producing a good or service, including both private costs and external costs.

Private Cost

The direct cost incurred by the producer or consumer of a good or service.

Social Cost =

Private cost + value of externality

Willingness to Pay

The maximum price a consumer is prepared to pay for a particular good or service.

Property Rights

Legally enforceable rules that define who owns or controls what resources and how they can be used.

Rent Seeking

The use of political influence to gain an economic advantage (e.g., through subsidies or regulations) without creating new wealth.

Market Failures

Situations in which the allocation of goods and services by a free market is not efficient.

Market Efficiency

A state where a market allocates goods and services optimally, maximizing aggregate social welfare.

Wealth Creation

The process of generating new economic value, wealth, or utility.

Maximum Wealth Creation

The optimal allocation of resources that results in the highest possible level of total economic value or well-being.

Economic Efficiency

A state where every resource is allocated optimally to serve each individual or entity in the best way while minimizing waste.

GDP

Gross Domestic Product; the total monetary value of all finished goods and services produced within a country's borders in a specific time period.

Capitalism

An economic system based on private ownership of the means of production and their operation for profit.

Socialism

An economic and political system in which the community, usually through the state, owns and controls the means of production.

Democracy

A system of government where the people directly or indirectly elect representatives to govern.

Autocracy

A system of government by one person with absolute power.

Authoritarianism

A form of government characterized by strong central authority and limited political freedoms.

Illiberalism

A political doctrine or practice that limits individual liberties and weakens democratic institutions, often in the name of national security or traditional values.

Liberalism

A political philosophy emphasizing individual rights, liberty, and equality, with government's role to protect these.

Decentralized Solutions

Approaches where decision-making and control are distributed among various actors or entities rather than concentrated in a central body.

Centralized Solutions

Approaches where decision-making authority and control are concentrated in a single, central entity or authority.

Public Problems

Issues that broadly affect society and often require collective action or government intervention to resolve.

Private Problems

Issues that primarily affect individuals or small groups and can typically be resolved without public intervention.

Collective Defense

An arrangement among states where an attack on one is considered an attack on all, prompting a collective response.

Human Capital

The skills, knowledge, and experience possessed by an individual or population, viewed in terms of their value or cost to an organization or country.

Incentives

Something that motivates or encourages someone to do something, especially financial rewards or penalties.

Private Sector / Private Sector Goods

The part of the economy that is controlled by private individuals and companies, not the government; goods and services produced by this sector.