ch 4 macroeconomics

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  1. Price ceiling
    A legally established maximum price a seller can charge
  2. Price floor
    A legally established minimum price a seller can be paid. (minimum wage)
  3. Market failure
    A situation in which market equlibrium result in too few or too many resources used in the production of goods or services. This inefficiency may justify goverment intervention.
  4. Cases of market failure
    • Lack of competition
    • Externalities
    • Public Goods
    • Income Inequality
  5. Externality
    A cost or benefit imposed on people other than the consumers and producers of a good or service.(pollution)
  6. Public Good
    • A good or services with two properties:
    • Users collectively consume benefits and,
    • There is no way to bar people who do not pay from consumming the good or service.
Card Set
ch 4 macroeconomics
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