Key concepts:
Types of Market Failure:
· Externalities- indirect benefits or costs of an activity, or the social costs not included in the price (baseball bat comp killing too many trees).
Public Goods: goods or services that cannot be consumed exclusively (Roads provided by taxes became it’s too hard to eliminate free riders).
Market Power: when one or more producers have control over an industry, creating less than optimal outcomes.
Natural Monopoly: Concentration of power may be most efficient. Firm produces desired output for consumers at lowest cost the Government may allow but will monitor the situation closely.
Inequities: the market may distribute income in an undesirable way. Without intervention some will have more than they need, while others lack basic necessities, for example, minimum wage laws.
Role of Government-: believe that government should function as the manager of an economic system under managed capitalism.
Types of Government Regulation:
· Economic Regulation
· Political Regulation
· Social Regulation
Types of Market Failure:
· Externalities- indirect benefits or costs of an activity, or the social costs not included in the price (baseball bat comp killing too many trees).
Public Goods: goods or services that cannot be consumed exclusively (Roads provided by taxes became it’s too hard to eliminate free riders).
Market Power: when one or more producers have control over an industry, creating less than optimal outcomes.
Natural Monopoly: Concentration of power may be most efficient. Firm produces desired output for consumers at lowest cost the Government may allow but will monitor the situation closely.
Inequities: the market may distribute income in an undesirable way. Without intervention some will have more than they need, while others lack basic necessities, for example, minimum wage laws.
Role of Government-: believe that government should function as the manager of an economic system under managed capitalism.
Types of Government Regulation:
· Economic Regulation
· Political Regulation
· Social Regulation
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