DIRECTIONS: As in the popular TV game show, you are given an answer to a question and you must respond with the question. For example, if the answer is, "a tax on imports", then the correct question is, "What is a tariff?"
- term used to describe the favorable effect effect that a production activity can have in another market.
- term used to describe the detrimental effect that a consumption activity can have towards another person.
- the two characteristics that identify "public goods".
- term used to describe the type of distortion that occurs when governments implement taxes, subsidies or regulations in otherwise perfectly competitive markets.
- term used to describe an equilibrium that arises in the presence of market imperfections and distortions.
- term used to descrbe a policy action that can raise economic efficiency to the greatest extent possible.
- term used to describe firms in less developed countries that have little chance of competing with the established firms located in the developed countries.
- type of comparative advantage that is not present in the short run but which develops in the long run.
- the first best policy option for a government that wishes to support an infant industry.
- the first-best policy option for a government that faces a foreign monopoly (with constant marginal costs) as the sole firm selling a product in the domestic market.