8 terms

Econ Midterm 2

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Terms in this set (...)

Transaction costs
The costs that parties incur in the process of agreeing to and following though on a bargin
pigovian tax
a tax enacted to correct the effects of a negative externality
public good
a good that is neither exclude nor rival in consumption
common resource
a good that is rival but not excludable in consumption
social welfare
producer+consumer surplus
pecuniary externality
when a market exchange affects other people through market prices
coase theorem
If transaction costs are low and property rights are clearly defined, private bargains will ensure that equilibrium is efficient even if there are externalities
efficient market hypothesis
the hypothesis that prices of securities fully reflect available information about securities