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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
Times taken30
Average score35.0%
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Description
Term
The branch of economics that combines a psychological approach with traditional models to understand decision making and its effects on economic participants
Behavioural Economics
Where one party to a transaction has more information than the other
Asymmetric Information
The area of the consumer and producer surpluses combined plus any tax revenue on a demand and supply curve
Economic Welfare
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
The way in which the benefit of receiving a subsidy is divided between consumers and producers
Incidence of a Subsidy
A payment made by the government to a supplier of products that are considered to be essential or which provide beneficial effects
Subsidy
Permits allowing a firm to emit a certain amount of pollution which can be traded between firms
Tradable Pollution Permits
Where a person lacks crucial information to make rational decisions
Imperfect Information
A tax charged directly to an individual based on a component of income
Direct Tax
A sudden event effecting an economy that is outside of a government's control
Exogenous Shock
Description
Term
Where a functional market produces at the wrong quantity or price
Partial Market Failure
The total of both private benefit and external benefit
Social Benefit
Where resources are not put to use efficiently
Misallocation of Resources
Where consumption of a product cannot be made dependent on payment thus giving firms little or no incentive to produce it
Free Rider Problem
That the actions of consumers, producers, and governments will always have effects that are unintended or unanticipated
Law of Unintended Consequences
Where a government designs policies for their own political benefit
Political Self Interest
Where both sides of the market have access to a similar amount of information
Symmetric Information
That which confers legal ownership of a good and legal control over how it is used
Property Rights
Who shoulders the greater tax burden when demand is relatively inelastic?
The Consumer
The loss in producer and consumer surplus due to an inefficient level of production
Deadweight Loss
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