Adam Smith’s theory of the invisible hand is often used to justify a hands-off approach to market activity. Can you give an example where government intervention in a market led to an inefficient outcome? How about an example where government intervention improved the outcome?

Critique the following statement as True or False and explain your reasoning in 2-3 sentences. "Market failures are observed when government intervention prevents market forces from guiding marketstoward an equilibrium."

What defines market equilibrium? How about market disequilibrium? What are the contrasting proposition regarding economic efficiency and equity?

Question Britain is proud of its National Health Service (NHS). In 1948, the National Health Service Act stipulated that the government would provide virtually free medical care for all citizens. Physicians receive a salary plus a per-patient payment from the government. The NHS embodies the socialist philosophy that profit-driven markets are not the appropriate mechanism for allocating health care. Markets serve two functions simultaneously: (1) allocation of existing goods and services among competing buyers, and (2) motivation for producers to bring new goods and services to the market. The NHS was established to replace market-determined prices with prioritized waiting lists as the allocation mechanism among competing buyers. Recently, however, the NHS has embraced the profit motive as a mechanism for performing the second function. The Economist reported that the government has introduced mechanisms to allow hospitals and individual inventors to profit from their innovations.…

Smith points out the possibility of producers contriving to raise prices. Are there other problems with the free-market system that he did not point out?

explain whether there has been a market failure, what type of failure, and what measures might solve it,  You should consider: the advantages and disadvantages of any solution whether doing nothing might be the best solution the concept of efficiency.  The only large employer in a local area pays its employees a low rate, and working conditions are poor. There is high unemployment in the area

What are market failures? Discuss examples of market failures. What can government do to improve the results of market failures?

For the scenarios below, identify the type of market failure, explain why it occurs and provide a solution: (1)    An auto repair shop convinces you that you need a $20,000 valve job when all you need is an oil change.    (2)  Everyone in the neighbourhood would benefit if an empty lot were turned into a park but no entrepreneur will come forward to finance the transformation (3) A barking dog in the backyard

How do economic incentives interact with pro-social behavior?

Suppose Fischer Pond is a common-property resource—anyone can fish without having to pay for access. Locke Lake is privately owned—people who want to fish must purchase one of a limited number of permits from the lake's owner each season. According to the incentives that private ownership creates, which of the following would you expect to happen?     Check all that apply. The owner of Locke Lake is likely to keep the lake clean and unpolluted.   The owner of Locke Lake is likely to limit the number of fishing permits in order to maintain a plentiful stock of fish.   Fischer Pond is less likely to experience a dwindling stock of fish each season.