Fill in the Blanks Market Failures (D)Online version Externality by Nilam Chandra 1 rider Market failure Free Positive Negative Externality smoking is the economic situation defined by an inefficient distribution of goods and services in the free market . 2 Externalities Non rivalrous Non excludable Market failures Free rider Public good occur when one person's actions affect another person's well - being , and the relevant costs and benefits are not reflected in market prices . 3 free goods negative rider externality failure market public positive A arises when my neighbors benefit from my cleaning up my yard . 4 externality rider failure excludable positive non negative free market A arises when one person's actions harm another . 5 externality failure market education smoking training An example of negative externality is . 6 pollution failure noise traffic congestion smoking education An example of positive externality is . 7 market externality failure Private hospital negative childcare Middlemore positive is an example of a public good . 8 Public goods Nonexcludable Free rider Market failure Non rivalrous Externality means that it is costly or impossible for one user to exclude others from using a good . 9 excludable Non externality positive Free rider Negative rivalrous means that when one person uses the good , it does not prevent others from using it . 10 positive public Private Market good externality taxation free A and services are administered by the government and paid for collectively through taxation . 11 externalities Non rivalrous market riders positive negative Free failures excludable are a problem because while not paying for the good or service they may continue to access or consume it .
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