Economics Chapter 5 Market Failure

Economics Chapter 5 Market Failure

1: To what extent is advertising the most effective way of increasing the consumption of merit goods?
2: Explain how the overuse of common access resources can lead to negative externalities.
3: Discuss the view that the best way to reduce the threat to sustainability, arising from the burning of fossil fuels, is for the government to prove subsidies to firm that provide energy through renewable source.
4: Explain why the under-consumption of merit goods causes market failure.
5: Discuss whether there should always be direct provision of public goods by the government.
6: Market failure can occur when there is asymmetric information, abuse of monopoly power and positive externalities. Explain why any two of these represent market failure.
7: Evaluate the view that regulation are the most effective government response to the market failure of negative externalities.
8: Explain why a government might decide to impose an indirect tax on the consumption of cigarettes.
9: Discuss the view that the overuse of common access resources in best addressed by government.
10: Explain two possible government responses to the abuse of monopoly power.
11: Evaluate the view that the market failure caused by the consumption of demerit goods is best dealt with through the use of taxation.
12: Discuss the view that governments should always try to prevent a monopoly occurring in a market.
13: Analyse the private and external benefits associated with the consumption of university education.
14: Evaluate the policies a government might use to increase the consumption of university education.
15: Using a price ceiling diagram, analyse the impact a maximum price might have on the market for food.
16: Discuss the policies a government might use to make food more affordable to low income groups.
17: Discuss two possible government responses to threats to sustainability.
18: To what extent might the problems of negative externalities of consumption be resolved by the use of indirect taxation?
19: Explain why negative externalities are an example of market failure.
20: Evaluate three policies that governments might implement to reduce negative externalities associated with the environment.

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