A-LEVEL Economics Theme 1 Topic 1.5 KEY WORDS

Occurs whenever a market leads to a misallocation of resource

Occurs when the public sector or intervention makes the situation worse

Difference in levels of income and wealth distrubtion

Occurs when less is produced than would be optimal

When taxes are imposed on goods that are harmful therefore increasing production costs and increasing price lowing sales

Creating a Regulation scheme can have high costs therefore costs are higher than benefit to social welfare

Government intervention can cause price signals to distort therefore does not show the true supply and demand

The costs of running a business

It has an impact on third parties can be COST/BENEFIT

When rules are applied on a business or organisation

Financial support from the government to encourage beneficial activates

Goods that are non- rivalrous and non excludable

When workers struggle to move job due to skill mismatch

When the government does not have the access to the correct information needed to make a informed decision

Firms voluntarily commit to environmental or ethical goals without legal enforcement.

When a firm dominates and has a market share of 25% or over

Government intervention leads to consequences that make the situation worse than before

Third party effects from economic activities.

When one individual has more information than the other on a transaction

Goods that are under consumed in a free market despite providing significant social benefit

The total private and external benefits EQUATION = SB=PB+EB

Are the internal benefits of running a business

Total private and external cost EQUATION= SC=PC+EC

Impacts third parties