market failure - when people who are not part of a marketplace interaction benefit from it or pay part of its costs, public goods - products provided by federal, state, and local government and consumed by the public as a group, free rider - person who avoids paying for a good or service but who benefits from the good or service anyway, infrastructure - consists of all the goods and services that are necessary for the functioning of society, externality - side effect of a product that affects someone other than the producer or the buyer, negative externality - externality that imposes costs on people who were not involved in the original economic activity, positive externality - externality that creates benefits for people who were not involved in the original economic activity, subsidy - government payment that helps cover the cost of an economic activity that has the potential to benefit the public as a whole, safety net - consists of government programs designed to protect people from economic hardships, transfer payment - transfers of income from one person or group to another even through the receiver does not provide anything in return, public transfer payment - transfer payment in which the government transfers income from taxpayers to recipients who do not provide anything in return , Tragedy of the commons - economic problem where the individual consumes a resource at the expense of society,

Chapter 3-3

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