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Externalities and Public Transfer Payments

Across
Most public transfer payments in area of __________ spending
- usually go to poor, aged, disabled, or people who lose their jobs
Externality--side effect on ___________ other than producer or buyer
positive externality benefits people uninvolved in ____________ .
Government tries to increase _________ externalities
Transfer payments move income from person or group to another - ______________ does not provide product in return
Down
A limitation of free enterprise:
- people unable to contribute cannot _______ all economic opportunities
Safety net--government programs designed to ________ people from economic hardship
Subsidy--government _________ to help cover cost of economic activity - subsidy to drug company to make flu vaccine yields fewer sick people
Government limits _______ externalities through taxes and fines - offset medical costs, provide incentives to reduce pollution
Market failure ________ when economic transactions cause externalities
negative externality--people ____________ in the transaction pay costs
Public transfer payment--made by government with _________ money