Macro Economics Chapter 04 Key Words Flashcards
2
Q
externality
A
A cost or benefit imposed on people other than the consumers and producers of a good or service.
3
Q
market failure
A
A situation in which market equilibrium results in too few or too many resources used in the production of a good or service. This inefficiency may justify government intervention.
4
Q
price ceiling
A
A legally established maximum price a seller can charge.
5
Q
price floor
A
A legally established minimum price a seller can be paid.
6
Q
public good
A
A good or service with two properties: (1) users collectively consume benefits, and (2) there is no way to bar people who do not pay (free riders) from consuming the good or service.
