| A | B |
|---|
| 5 types of market failures | inadequate comp, resource innobility, inadequate info, externalities, & public goods. |
| Inadequate competition | monopolies and oligopolies not enough competition. |
| 3 powers to cure inadequate comp | regulating business practices, aprove/disaprove mergers, breaking up monop. |
| Inadequate information is | consumer knowledge of price & consumer knowledge of product. |
| Govt cure inadequate info through | regulations and labeling. |
| Resource immobility is | imobile resources. |
| Govt cures resource immobility by | doing nothing b/c its not cost efficient. |
| Externalities are market failures b/c they are | cost or benefits which are external to the market. |
| 2 types of externalities: | positive and negative. |
| The most popular externality is: | negative. |
| Govt cures externality market failures by: | zoning laws and home owners associations. |
| 3 examples of public goods: | education, national defense, and health care in some countries. |
| Public markets are failure b/c: | if you leave it to market, the market won't supply enough. |
| Free rider program: | leads to public goods. Is people not paying for a public good. |
| Public goods are different from other failures b/c | each society chooses there good so it is all different. |
