Answer:
A - Intellectual Property Rights - can be used for innovations
B - A good is non excludable but could be rivalrous or non rivalrous. - Free rider problem
C - An example of "There is no such thing as a fee lunch" National Defense
D - Overproduction - Negative externality
E - Excludable Rivalrous
F - The area of the triangle in a demand and supply model which is formed as a result of negative or positive externality. - Magnitude of market failure
G - Non excludable and Rivalrous - Free rider problem
H - Market output will be lower than the socially efficient / optimal level of output. - Positive externality
I - At the intersection of marginal social cost curve and the demand curve.
J - The level of output where negative externality is equal to positive externality - Market producing socially optimal level of output.
K - Decline in production due to external factors such as bad news coverage about a product. Negative externality
L - A positive or negative side effect of an action that affects the wellbeing of a bystander or Third party. Externality
M - Subsidy positive externality
N - Both excludable and non rivalrous Congested non troll road
O- Taxation - national defense
Explanation:
When the market is producing optimal level of output then there will be no negative or positive externality. The positive externality is one when a firm cannot attain the full benefits of the decision made by them. Negative externality is one in which there is some undesirable impact of the market condition on the production.
