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Edexcel Economics 3 Market Failure & Government Intervention

In this quiz the answers change every time you play! Guess the terms that fit these definitions
Answer must correspond to highlighted box!
Quiz by robalot39
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Last updated: May 29, 2019
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First submittedMay 27, 2019
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Description
Term
Where resources are distributed in a way that maximises consumer satisfaction, and where the price of a product is equal to the marginal cost of producing it
Allocative Efficiency
Where there is an optimal allocation of inputs producing maximum output for minimum cost
Productive Efficiency
A sudden event effecting an economy that is outside of a government's control
Exogenous Shock
Where governments set maximum or minimum prices
Price Controls
A price above which producers cannot charge for their product
Maximum Price
That the actions of consumers, producers, and governments will always have effects that are unintended or unanticipated
Law of Unintended Consequences
Who shoulders the greater tax burden when supply is relatively inelastic?
The Producer
Where the social costs of production and/or consumption exceed the private costs as a result of no appropriate compensation being paid
Negative Externality
A tax that falls uniformly upon all consumers thus taking a larger percentage of income from low-income earners than from high-income earners
Regressive Tax
What should a tax equal when there are external costs?
Marginal External Cost
Description
Term
Where both sides of the market have access to a similar amount of information
Symmetric Information
Where the social benefits of production and/or consumption exceed the private benefits
Positive Externality
Where the implementation of one government policy will adversely affect another
Conflicting Policy Objectives
Where a person is more likely to selectively engage in trades that benefit them the most to others' disadvantage
Adverse Selection
Where a functional market produces at the wrong quantity or price
Partial Market Failure
Where circumstances may change between the recognition of a problem and the designing, and implementation of a policy
Time Lags
Where social costs exceed social benefits
welfare loss
The branch of economics that combines a psychological approach with traditional models to understand decision making and its effects on economic participants
Behavioural Economics
A benefit enjoyed by an individual or firm
Private Benefit
A good or service that a consumer cannot decide against using due to collective supply
Non-Rejectable
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