Question

The third-party effects or side-effects (positive or negative) of a transaction between two parties (e.g., doctors and patients), which is not reflected in the cost of the goods or services involved, and which offer a rationale for government provision of social insurance like Medicare and Medicaid are called

externalities

merit goods

private goods

public goods

excludabilities

Answer 1

The answer for the question is EXTERNALITIES.

• The third party effects or side effects (positive or negative) of a transaction between two parties ( eg doctors and patients) which is not reflected in the cost of the goods or services involved and which offer a rationale for government provision of socail insurance like medicare and medicaid are called externalities
• Merit goods- A merit good can be defined as a good which would be under consumed and under produced in the free market economy. When consumed, a merit good creates positive externalities ( an externality being a third party / spill over effect which arises from the consumption or production of the good/ service)
• Private goods- A private good is a product that must be purchased to be consumed and consumption by one individual prevents another individual from consuming it. Economics refer to private goods as rivalrous and excludable and can be contrasted with public goods.
• Public goods - Public goods are commodities or services that benefit all members of society and which are often provided for free through public taxation.
• Public goods are the opposite of private goods, which are inherently scarce and are paid for separately by individuals.
• Excludabilities- A good or service is excludable if it is possible to prevent people ( consumers) who have not paid for it from having access to it. By comparison, a good or service is excludable if non paying consumers cannot be prevented from accessing it.