Economics: Topic 6, Year 2 Definitions

Occurs when individuals pursue rational self-interest in the use of a common resource, but in so doing they create adverse effects for the group or society.

Describes the legal ownership of a resource by an individual or organisation.

An attempt by government to ensure that markets operate more efficiently, competitively and in the interest of consumers. Usually the interest of consumers is the paramount objective.

A situation in which the government owns property, a firm or an industry.

The transfer of ownership of a business from government to the private sector.

The imposition of rules by government in order to modify or influence the economic behaviour of organisations and individuals.

The process of removing restrictions and/or regulations that hinder free competition in the supply of goods and services.

Occurs when agencies that have been formed by government to monitor and regulate an industry are 'captured' by the industry and start to operate in the interests of the industry rather than the consumers they are meant to protect.

Gives firms legal rights to create a certain level of pollution over a particular period of time.