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AP Micro: 6.1 Introduction Vocabulary

Name: ___________________________________
Horizontales
When either the buyer or the seller has more information than the other, economists say there is _____ information which leads to adverse selection.
Monopoly, monopolistic competition, and Oligopoly market structures give firms ________.
Allocative efficiency is the ______ level of production when the firm and the customer internalize all public and private costs and benefits.
The additional benefit to society as a whole as a result of the production of the next additional unit.
The socially optimal level of production for a good with negative externalities will be at a quantity where the MSB ________ or is equal to the MSC.
Verticales
The extra cost to society as a whole for the production of the next additional unit.
The government might choose to pay a _______ to a firm to increase the quantity produced if there was too little of the good being produced.
When firms do not produce at the point of allocative efficiency and it results in a loss of consumer and/or producer surplus.
The positive or negative effect of a transaction which is felt by a third party who is not involved in the transaction (not the buyer or seller).
To eliminate deadweight loss, ______ policies might include a tax, subsidy, or environmental regulation.