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Level 1 - definitions of subsidies and highlight what is the market failure (in this case underconsumption of merit goods / positive externalities) and a short answer to the question also lay out how the ...

Externalities are effects that occur, due to a transaction, on third parties (people who were not involved in the original transaction). Hence, positive externalities of consumption are produced when the ...

Perfect competiton in a market is defined as being a set of conditions where markets have little to no entry or exit barriers. These may be natural or synthetic. An example of a natural barrier to entry i...

Changes in price mean a shift along the curve, changes other than the price of a good (e.g. change in price of a substitute good) shift the demand curve. 

Economics is all about making choices. These choices are ruled by scarcity, which is the theory that there are finite resources at our disposable. Because of scarcity, we cannot have everything we want. T...