econ flashcards theme 1 market failure definitions

0.0(0)
Studied by 0 people
call kaiCall Kai
Locked
learnLearn
examPractice Test
spaced repetitionSpaced Repetition
heart puzzleMatch
flashcardsFlashcards
GameKnowt Play
Card Sorting

1/7

encourage image

There's no tags or description

Looks like no tags are added yet.

Last updated 3:40 PM on 9/1/26
Name
Mastery
Learn
Test
Matching
Spaced
Call with Kai
Chat

No analytics yet

Send a link to your students to track their progress

8 Terms

1
New cards

Define market failure.

Free markets cause a misallocation of resources, so allocative efficiency is not achieved and MSB ≠ MSC.

2
New cards

Complete market failure?

A market does not exist at all for a good.

3
New cards

Partial market failure?

A market exists but produces the wrong quantity/price.

4
New cards

Define externality.

A cost/benefit from an economic transaction experienced by a third party and not reflected in market price.

5
New cards

MPC?

Cost to the producer of producing one additional unit.

6
New cards

MSC?

Total cost to society of one additional unit: MPC + external cost.

7
New cards

MPB?

Benefit to the consumer of consuming one additional unit.

8
New cards

MSB?

Total benefit to society: MPB + external benefit.