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ADVERSE SELECTION: When a negotiation between two people with different amounts of information, that is, asymmetric information, restricts the quality of the good traded. This typically happens because the person with more information is able to negotiate a favorable exchange. This is frequently referred to as the "market for lemons."
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Lesson 6: Market Supply | Unit 4: Determinants
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Page: 15 of 19
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The five determinants that cause the supply curve to shift are:- Resource prices: If the price of any resource (labor, capital, land, or entrepreneurship) changes, so too does production cost and the ability to supply a good.
- Technology: Improving production techniques enhance the ability to supply a good.
- Prices of other goods: Goods using the same inputs can be either substitutes or complements in production.
- Expectations: Sellers' current supply depends on expectations of future prices.
- Number of sellers: More sellers, more supply. Fewer sellers, less supply.
These categories include all factors other than price that affect supply.
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NEAR-PUBLIC GOODS Goods characterized by nonrival consumption and the ability to exclude nonpayers. Near-public goods are one of four types of goods differentiated by consumption rivalry and nonpayer excludability. The other three goods are near-public (rival consumption and nonpayers can be excluded), public (nonrival consumption and nonpayers cannot be excluded), and common-property (rival consumption and nonpayers cannot be excluded). The ease of excluding of nonpayers means near-public goods can be exchanged through markets, but nonrival consumption means efficiency can only be achieved with government intervention.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time at a dollar discount store looking to buy either a remote controlled World War I bi-plane or a wall poster commemorating Thor Heyerdahl's Pacific crossing aboard the Kon-Tiki. Be on the lookout for infected paper cuts.
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This isn't me! What am I?
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Only 1% of the U.S. population paid income taxes when the income tax was established in 1914.
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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MFN
Most-Favoured Nation
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