Introduction to Public Economics

Vocabulary flashcards covering the fundamental concepts, nature, and scope of Public Economics as well as budgeting types and processes.

Public economics

A branch of economics that deals with the role of the government in the economy and examines how government policies affect economic efficiency, equity, and the distribution of resources.

Public Goods

Goods that are characterized as being non-excludable and non-rivalrous, such as national defense, public parks, and street lighting.

Market failure

A situation that occurs when markets allocate resources inefficiently due to externalities or imperfect information.

Free Rider Problem

A situation where people benefit from public goods without paying, which leads to the under-provision of those goods.

Mixed Goods

Goods that possess both public and private characteristics, such as education.

Merit Goods

Socially beneficial goods, with healthcare cited as a primary example.

Budget

A financial plan detailing expected revenue and expenditure.

Balanced Budget

A type of budget where expected revenue and expenditure are equal.

Surplus Budget

A type of budget where expected revenue exceeds expected expenditure.

Deficit Budget

A type of budget where expected expenditure exceeds expected revenue.

Union Budget in India

A financial plan prepared by the Ministry of Finance, presented in Parliament, approved by both Houses, and implemented.

Social Goods

Goods that improve welfare.

Scope of Public Economics

The areas of study including public expenditure, public revenue, budgeting, public policy, and the distribution of wealth.