Chapter 9, Problem 4QFD

Government intervention is one possible solution for market failure. What is one possible reason why a government controlled used car market may not provide an efficient outcome?

In the presence of market failure ,the argument for government intervention is only compelling but not always beneficial. True or false, and explain

Under what conditions might government intervention in an economy improve a market outcome?

Example of market gaps in the community

Identify a newspaper article that illustrates a market failure in Barbados. Ensure that you provide a screenshot of the article in your submission. NOTE: Only the following market failures should be examined: public good, asymmetric information, positive or negative externality.    Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome.  How will the imposition of the chosen government policy impact consumersurplus, producer surplus and total surplus in this scenario?

Explain the measures used by the government to correct each of the following sources              of market failure:              (i) demerit goods              (ii)  Negative externality

The U.S. government fights the use of illegal drugs in a variety of ways, including spraying crops with poisonous chemicals; imposing jail sentences for dealers; and confiscating drug-transporting cars, boats, and planes. Which market failure motivates the government to interfere with the market for drugs: lack of competition, externalities, or public goods?

Which of the following is an example of market failure? Public goods Externality Asymmetric information A & B All of the above

Identify what constitutes social cost of production.