A. When the market fails there are calls for the government to step in and clean up the mess. Here, we consider three market failures:
1. Externalities,
2. Public goods, and
3. Informational problems.
Examine each market failure and the effect of each failure considering perfect competition as a benchmark.
B. Write a brief report (500 words) addressing the following:
1. Are there sources of market failure other than those listed in your readings?
2. Describe how government intervention to address a market failure might worsen the situation.
3. Provide an example of where government intervention does work and why that is so.

  • CreatedJuly 29, 2013
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