MICRO TEST 3

The supply of a good or service that reflect only the private costs of its production is called:

private supply

_______Demand is the demand for a good or service that reflects both the private and external benefits of its consumption.

social

If some people can be prevented or excluded from consuming a good or service, then that good or service is called:

excludable

Such efforts as pollution controls, taxes, regulation, the enforcement of property right, and cleanliness standards all can help minimize _____ costs and move toward the efficient outcome.

external

markets characterized by either positive or negative ______ may result in an inefficient outcome.

externalities

When some people can not be prevented, or excluded, from consuming a good or service, that good or service is said to be:

nonexcludable

When consumption of a good or service by one person does not diminish the amount available to someone else, the good is said to be_____.

nonrivalrous

In economics, the satisfaction or happiness received from the consumption of goods and services is known as _______.

utility

When a _____externality exists, the socially optimal level of output will be greater than that resulting from a _____ market

-positive, private

Social supply is the supply of a good or service that reflects both the ______ and _______ costs of its production.

-private, external

A private company can not provide ______ goods, because it does not have the ability to force people to pay for good or service by collecting _____.

-public -taxes

Governments can provide ________ goods, because they have the ability to force people to _______ for a good or service by collecting taxes.

-public, pay

When there are positive externalities, governments intervene in the marketplace to stimulate demand toward the socially efficient level through:

-subsidies -tax credits

Private companies often find it difficult to earn a profit by providing a good that is nonexcludeable due to:

-the free-rider problem -consumers who consume the good without paying for it.

The market produces the right goods in the correct amounts, using the fewest resources possible when....

-there is productive efficiency -there is allocative efficiency

The unpaid benefit of an activity that is enjoyed by a third party is called ___.

a positive externality

When goods and services are nonrivalrous, the ________ of a good or service by one person does not change the quantity available for consumption by others.

consumption

social marginal cost

is the sum of private marginal cost and external marginal cost.

social supply

is the supply of a good or service that reflects both the private and external costs of its production.

Many of the goods that are taxed by the government, such as cigarettes, gasoline, and alcohol, generate _______ externalities.

negative

When a ________ externality exists, the socially optimal level of output will be less than that resulting from a private market.

negative

When people can not be prevented or excluded from consuming a good or service, then that good or service is called ____.

nonexcludeable

When some people can not be prevented, or exlcuded, from consuming a good or service, that good or service is said to be :

nonexludeable

When externalities exist, ______.

outside intervention may be able to improve the market outcome, increasing efficiency and economic surplus.

_________ demand is the demand for a good or service that considers only the private benefits of its consumption.

private

The private marginal cost is the cost to the:

producer of producing an additional unit of a good or service.

private markets fall to provide the optimal amount of ______ because they are non rival and non excludable.

public goods

An externality

the benefit enjoyed by or cost imposed on a third party not directly involved in the production or consumption of a good or service.

private demand is

the demand for a good or service that considers only the private benefits of its consumption

A property right is :

the exclusive right to determine how a resource is used.

Suppose you live near a large factory that produces a good that you do not consume. If you are subjected to loud noises and bad odors from the factory, then you experienced _______.

a negative externality

The difference between total utility and marginal utility is that marginal utility is the the:

added satisfaction of consuming another unit of the good, whereas total utility is the cumulative marginal utilities of all consumed.

Private demand is the demand for a good or service that considers only the private _____ of its consumption.

benefits