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Vocabulary Review
Practice the vocabulary words from the lesson.
- Economic side-effects or third-party effects, in which some of the benefits or costs associated with the production or consumption of a product affect someone other than the direct producer or consumer of the product. Can be positive or negative.
Answer: Externalities
- A beneficial or positive side effect that results when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in a market exchange.
Answer: Positive Externality
- A negative side effect that results when the production or consumption of a good or service affects the welfare of people who are not the parties directly involved in a market exchange.
Answer: Negative Externality
- Sometimes referred to as "third-party benefit" or "spillover benefit," it is a benefit obtained without compensation by third parties from the production or consumption of other parties.
Answer: Positive Externality
- Sometimes referred to as "third-party cost" or "spillover cost," it is a cost imposed on third parties by the production or consumption of other parties.
Answer: Negative Externality
- ________ blank is the prescription of price and output for a specific industry, often a natural monopoly.
Answer: Economic regulation
- ________ blank is the prescription of health, safety, performance, environmental, output and job standards across several industries.
Answer: Social regulation
- People who receive the benefits of something without actually paying.
Answer: Free Riders
- Another term for 'third party benefit' or 'positive externality'
Answer: spillover benefit
- Another term for 'spillover benefit' or 'positive externality'
Answer: third party benefit
- Another term for 'spillover cost' or 'negative externality'
Answer: third party cost
- Another term for 'third party cost' or 'negative externality'
Answer: spillover cost