Section 2: The effects of the market

• Economie
• Middelbare school
• vwo
• Leerjaar 3

Programme

actualities and a new concept. 

concepts of distortions in markets 

Standard of living

The degree to which people are capable of satisfying their need for scarce products and services. 

You saw a video in the intro. Can you tell me the difference of the living standard between that country and the Netherlands

External efects

A side-effect of the market (consequence of the supply or demand for which nobody pays.)

An external effect is unintentional!

Could be both positive and negative.

Name one positive and one negative external effect of public transport

Effects are part of the price

effects  not part of the price

Inflation

Earthquickes in the value of houses in Groningen 

fresh clean air 

taxes 

What would be good policies to reduce the negative external effect?

Government intervention

Tries to limit negative external effects by letting people pay. 

The user pays.