Micro 6

Question 1

Government failure

Answer 1

When government intervention leads to a net welfare loss in society

Question 2

Maximum price

Answer 2

A ceiling price which a firm cannot charge above

Question 3

Minimum price

Answer 3

A floor price which a firm cannot charge below

Question 4

Information provision

Answer 4

When the government intervenes to provide information to correct market failure

Question 5

Information gaps

Answer 5

When an economi agent lacks the information needed to make a rational decision

Question 6

Assymetric information

Answer 6

Where one party has more information than the other, leading to market failure

Question 7

Symmetric informaton

Answer 7

Where buyers and sellers both have acces to the same information