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\author{egomezc}
\pdfinfo{
  /Title (micro-economics-cheat-sheet.pdf)
  /Creator (Cheatography)
  /Author (egomezc)
  /Subject (Micro economics Cheat Sheet)
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    \vspace{-2pt}\large{\bf{\textcolor{DarkBackground}{\textrm{Micro economics Cheat Sheet}}}} \\
    \normalsize{by \textcolor{DarkBackground}{egomezc} via \textcolor{DarkBackground}{\uline{cheatography.com/146282/cs/31608/}}}
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  \mymulticolumn{2}{p{5.377cm}}{\bf\textcolor{white}{Cheatographer}}  \\
  \vspace{-2pt}egomezc \\
  \uline{cheatography.com/egomezc} \\
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  \mymulticolumn{1}{p{5.377cm}}{\bf\textcolor{white}{Cheat Sheet}}  \\
   \vspace{-2pt}Published 10th April, 2022.\\
   Updated 10th April, 2022.\\
   Page {\thepage} of \pageref{LastPage}.
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  Measure your website readability!\\
  www.readability-score.com
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\begin{multicols*}{3}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Law of demand}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Demand}}: the quantity of a good or service that consumers are willing and able to purchase at a given price in a particular time period} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Law of demand}}: quantity demanded increases when prices decrease and vise versa} \tn 
% Row Count 5 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{ASSUMPTIONS} \tn 
% Row Count 6 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Income effect}}: lower price = higher income = higher demand} \tn 
% Row Count 8 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Substitution effect}}: consumers replace higher priced products with lower priced ones.} \tn 
% Row Count 10 (+ 2)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Diminishing marginal utility}}: as consumption increases, the satisfaction gained from consuming one additional unit of a product decreases.} \tn 
% Row Count 13 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Demand curve}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{5.377cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/egomezc_1649618514_Screen Shot 2022-04-10 at 2.13.37 PM.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The demand curve illustrates an inverse relationship which explores how an increase in price leads to a decrease in the quantity demanded}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Non price determinants of demand}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Future price expectations} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Income} \tn 
% Row Count 2 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Tastes and preferences} \tn 
% Row Count 3 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Price of related goods (substitutes)} \tn 
% Row Count 4 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Price of related goods (complementary)} \tn 
% Row Count 5 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Number of consumers} \tn 
% Row Count 6 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Law of supply}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Supply}}: quantity of goods and services that firms are willing and able to sell at any given price} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Law of supply}}: As price increases, supply increases} \tn 
% Row Count 5 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{ASSUMPTIONS} \tn 
% Row Count 6 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Diminishing marginal returns}}: after some optimal level of capacity is reached, adding an additional factor of production will actually result in smaller increases in output} \tn 
% Row Count 10 (+ 4)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Increasing marginal costs}}: firms are willing and able to increase production only if they receive a higher price for the additional units of output.} \tn 
% Row Count 14 (+ 4)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Supply curve}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{5.377cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/egomezc_1649619102_Screen Shot 2022-04-10 at 2.31.12 PM.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{An increase in the price of tuna fish provides an incentive on producers to spend more time and effort to catch or farm tuna fish.}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Non price determinants of supply}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Costs of factors of production} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Price of related goods} \tn 
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\mymulticolumn{1}{x{5.377cm}}{Indirect taxes} \tn 
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\mymulticolumn{1}{x{5.377cm}}{Subsidies} \tn 
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% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Future price expectations} \tn 
% Row Count 5 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Changes in technology} \tn 
% Row Count 6 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
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\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Competitive market equilibrium}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Market equilibrium}}: When the quantity demanded for a product is equal to the quantity supplied of the product} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Equilibrium price}}: the point where the demand for the product matches the supply of the product} \tn 
% Row Count 5 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Market disequilibrium}}: when the quantity demanded for a product is either higher or lower than the quantity supplied for the product} \tn 
% Row Count 8 (+ 3)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Excess supply}}: e price of a product is set above equilibrium price, creating a surplus in the market represented by the higher quantity supplied than demanded} \tn 
% Row Count 12 (+ 4)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Excess demand}}: price for a product is set below equilibrium price, resulting in a higher demand and a lower supply} \tn 
% Row Count 15 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Functions of the price mechanism}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{The price mechanism}}: the interactions between buyers and sellers in order to allocate resources, therefore determining production and consumption choices} \tn 
% Row Count 4 (+ 4)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Signalling function}}: aspect of the price mechanism that signifies to producers and consumers where resources are required} \tn 
% Row Count 7 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Incentive function}}: as price changes, the mechanism provides an incentive for producers and consumers to change their behaviour in order to maximize their benefits} \tn 
% Row Count 11 (+ 4)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Rationing function}}: Higher prices, lower the quantity demanded therefore helping to preserve the good or service} \tn 
% Row Count 14 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Surpluses}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Consumer}}: Benefit to buyers who can purchase the product at a lower price than they were willing and able to pay} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Producer}}: Benefit to firms who receive a price that is higher than the price at which they were willing to supply at} \tn 
% Row Count 6 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Social}}: Sum of consumer and producer surplus at a given market price and output, thereby maximizing economic welfare} \tn 
% Row Count 9 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Allocative efficiency}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{5.377cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/egomezc_1649619790_Screen Shot 2022-04-10 at 2.42.25 PM.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Socially optimum situation that occurs when resources are distributed in a way that allows consumers and producers to gain the maximum benefit}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Rational consumer choice}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{decision-making process based on the assumption that people make choices that result in the optimal level of benefits} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{ASSUMPTIONS}}} \tn 
% Row Count 4 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Consumer rationality} \tn 
% Row Count 5 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Utility maximization} \tn 
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% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Perfect information} \tn 
% Row Count 7 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{LIMITATIONS}}} \tn 
% Row Count 8 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Biases (rule of thumb, anchoring, framing and availability)} \tn 
% Row Count 10 (+ 2)
% Row 7
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Bounded rationality} \tn 
% Row Count 11 (+ 1)
% Row 8
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Bounded self control} \tn 
% Row Count 12 (+ 1)
% Row 9
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Bounded selfishness} \tn 
% Row Count 13 (+ 1)
% Row 10
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Imperfect information} \tn 
% Row Count 14 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Behavioural economics}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Choice architecture}}: the deliberate design of different ways of presenting choices to members of society, and the impact of these methods on decision-making.} \tn 
% Row Count 4 (+ 4)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Nudge theory}}: the practice of influencing the choices that people make. Nudges are created by choice architects using small prompts or tweaks to alter social and economic behaviour, but without taking away the power for people to choose.} \tn 
% Row Count 9 (+ 5)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Business objectives}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{profit maximization}}: Sales level where profits are the highest} \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{CSR}}: commit ethical objectives to benefit stakeholders} \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Market share}}: a firm's portion of the total value of sales revenue} \tn 
% Row Count 6 (+ 2)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Satisfaction}}: aim for a satisfactory or adequate level or profit} \tn 
% Row Count 8 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Growth}}: increasing the size and scale of operations of a firm} \tn 
% Row Count 10 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Price elasticity of demand}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The responsiveness of quantity demanded for a good in relation to a change in the price for the product} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Price elastic}}: if a slight change in the price or income leads to a large change in the demand for the product.} \tn 
% Row Count 6 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Price inelastic}}: if a change in price or income has little impact on the demand for a good or service.} \tn 
% Row Count 9 (+ 3)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Formula:}} PED = \% change in QD / \% change in price} \tn 
% Row Count 11 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{DEGREES OF PED VALUES}}} \tn 
% Row Count 12 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PED \textgreater{} 1 → price elastic demand} \tn 
% Row Count 13 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{PED \textless{} 1 → price inelastic demand} \tn 
% Row Count 14 (+ 1)
% Row 7
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PED = 0 → perfectly price inelastic demand} \tn 
% Row Count 15 (+ 1)
% Row 8
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{PED = ∞ → perfectly price elastic demand} \tn 
% Row Count 16 (+ 1)
% Row 9
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PED = 1 → unitary elastic demand} \tn 
% Row Count 17 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Price elasticity of supply}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The degree of responsiveness of quantity supplied of a product due to a change in its price} \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Formula}}: PES = \% change in quantity supplied / \% change in price} \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{DEGREES OF PES VALUES}}} \tn 
% Row Count 5 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PES \textgreater{} 1 → price elastic supply} \tn 
% Row Count 6 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{PES \textless{} 1 → price inelastic supply} \tn 
% Row Count 7 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PES = 0 → perfectly price inelastic supply} \tn 
% Row Count 8 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{PES = ∞ → perfectly price elastic supply} \tn 
% Row Count 9 (+ 1)
% Row 7
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{PES = 1 → unitary elastic supply} \tn 
% Row Count 10 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Income elasticity of demand}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The degree of responsiveness of demand following a change in income} \tn 
% Row Count 2 (+ 2)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Formula}}: YED = \% change in QD / \% change in income} \tn 
% Row Count 4 (+ 2)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{YED SIGNS}}} \tn 
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% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{YED + \textless{} 1 → normal goods} \tn 
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% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{YED + \textgreater{} 1 →Luxury goods} \tn 
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% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{YED - → Inferior goods} \tn 
% Row Count 8 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{YED Engel curve}}  \tn
\SetRowColor{LightBackground}
\mymulticolumn{1}{p{5.377cm}}{\vspace{1px}\centerline{\includegraphics[width=5.1cm]{/web/www.cheatography.com/public/uploads/egomezc_1649620750_Screen Shot 2022-04-10 at 2.58.50 PM.png}}} \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The engel curve is used to demonstrate the relationship between income and the quantity demanded}  \tn 
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Reasons for government intervention}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Earn government revenue} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Support firms} \tn 
% Row Count 2 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Support households on low incomes} \tn 
% Row Count 3 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Influence the level of production} \tn 
% Row Count 4 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Influence the level of consumption} \tn 
% Row Count 5 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{To correct market failure} \tn 
% Row Count 6 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Promote equity} \tn 
% Row Count 7 (+ 1)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Main forms of government intervention}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{PRICE CONTROLS}}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Government regulations establishing a maximum or minimum price to be charged for certain goods and services. They consist of price ceilings and price floors.} \tn 
% Row Count 5 (+ 4)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{price ceilings}}: limits the maximum price in order to encourage output and consumption.} \tn 
% Row Count 7 (+ 2)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{ Price floor}}: binding minimum price in order to encourage production and supply} \tn 
% Row Count 9 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{INDIRECT TAXES}}} \tn 
% Row Count 10 (+ 1)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{A government levy or charge on the sale of goods and services, rather than on incomes or wealth.} \tn 
% Row Count 12 (+ 2)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{specific}}: charge a fixed amount of tax per unit sold} \tn 
% Row Count 14 (+ 2)
% Row 7
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Ad valorem}}: impose a percentage tax on the value of a good or service.} \tn 
% Row Count 16 (+ 2)
% Row 8
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{SUBSIDIES}}} \tn 
% Row Count 17 (+ 1)
% Row 9
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{a sum of money granted to help keep the price of a commodity or service low.} \tn 
% Row Count 19 (+ 2)
% Row 10
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{DIRECT PROVISION}}} \tn 
% Row Count 20 (+ 1)
% Row 11
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{Government provides certain goods and services deemed to be in the best interest of the public.} \tn 
% Row Count 22 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Market failure - externalities main terms}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Market failure}}: when the signalling, incentive and rationing functions of the price mechanism fail to operate optimally, which leads to a loss in economic welfare. It is when there is a misallocation of resources} \tn 
% Row Count 5 (+ 5)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{private benefits}}: advantages or gains of production and consumption enjoyed by an individual firm or person.} \tn 
% Row Count 8 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Private costs}}: actual expenses incurred by an individual firm or person} \tn 
% Row Count 10 (+ 2)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Social benefits}}: benefits of consumption or production, that is, the sum of private benefits and external benefits} \tn 
% Row Count 13 (+ 3)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Social costs}}: costs of consumption or production, that is, the sum of private costs and external costs} \tn 
% Row Count 16 (+ 3)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{MPB}}: additional value enjoyed by households and firms from the consumption or production of an extra unit of a particular good or service.} \tn 
% Row Count 19 (+ 3)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{MPC}} additional expense of production for firms or the extra charge paid by customers for the output or consumption of an extra unit of a good or service} \tn 
% Row Count 23 (+ 4)
% Row 7
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{MSB}}: total gains to society from an extra unit of production or consumption of a particular good or service} \tn 
% Row Count 26 (+ 3)
% Row 8
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{MSC}} total expenses to society from an extra unit of production or consumption of a particular product} \tn 
% Row Count 29 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Externalities}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{The external costs or benefits of an economic transaction, causing the market to fail to achieve the socially optimal level of consumption and production} \tn 
% Row Count 4 (+ 4)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Positive consumption}}: When consuming a good or service, provides a benefit to an unrelated third party} \tn 
% Row Count 7 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Positive production}}: the positive effect an activity imposes on an unrelated third party} \tn 
% Row Count 9 (+ 2)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Negative consumption}}: when consuming a good causes a harmful effect to a third party} \tn 
% Row Count 11 (+ 2)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Negative production}}: the production process results in a harmful effect on a third party.} \tn 
% Row Count 13 (+ 2)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{INTERVENTION TO CORRECT EXTERNALITIES} \tn 
% Row Count 14 (+ 1)
% Row 6
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Indirect taxes, carbon taxes, education, international agreements, subsidies, direct provision} \tn 
% Row Count 16 (+ 2)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Public goods}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Collective consumption goods that have two key characteristics of being non rivalrous and non excludable} \tn 
% Row Count 3 (+ 3)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Non rivalrous}}: a person's consumption of a public good does not limit the benefits available to other people.} \tn 
% Row Count 6 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Non excludable}}: firms cannot exclude people from the benefits of consumption} \tn 
% Row Count 8 (+ 2)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{FREE RIDER PROBLEM}}} \tn 
% Row Count 9 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{When people have access to a good or service without having to pay for it. As a result, the good or service will be under provided or not provided at all in the free market} \tn 
% Row Count 13 (+ 4)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Asymmetric information}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{A source of market failure that exists when one economic agent (buyer or seller) has more information than the other in an economic transaction. It occurs owing to incomplete information or inaccessibility to information.} \tn 
% Row Count 5 (+ 5)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Adverse selection}}: the undesired decisions or outcomes that occur when buyers and sellers have access to imperfect information.} \tn 
% Row Count 8 (+ 3)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Moral hazard}}: situation where a party protected from risk behaves differently than if they were fully exposed to the risk.} \tn 
% Row Count 11 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}

\begin{tabularx}{5.377cm}{X}
\SetRowColor{DarkBackground}
\mymulticolumn{1}{x{5.377cm}}{\bf\textcolor{white}{Responses to asymmetric information}}  \tn
% Row 0
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{GOVERNMENT RESPONSES}}} \tn 
% Row Count 1 (+ 1)
% Row 1
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{legislation} \tn 
% Row Count 2 (+ 1)
% Row 2
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{Provision of information} \tn 
% Row Count 3 (+ 1)
% Row 3
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{PRIVATE RESPONSES}}} \tn 
% Row Count 4 (+ 1)
% Row 4
\SetRowColor{LightBackground}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Signalling}}: used by parties with access to more information to maximize their own level of satisfaction} \tn 
% Row Count 7 (+ 3)
% Row 5
\SetRowColor{white}
\mymulticolumn{1}{x{5.377cm}}{{\bf{Screening}}: used by parties with access to less information to maximize their own level of satisfaction} \tn 
% Row Count 10 (+ 3)
\hhline{>{\arrayrulecolor{DarkBackground}}-}
\end{tabularx}
\par\addvspace{1.3em}


% That's all folks
\end{multicols*}

\end{document}