Market+failure

Free market forces sometimes fail to produce the desired equilibrium quantity and/or price for a variety of goods & services that benefits society as a whole. Sometimes, as in the case of externalities, if the external costs or benefits (costs or benefits borne by people other than the producer & consumer) of consuming or producing a good, are minimal, then the government will not intervene. If, however, these external costs/benefits are deemed significant 'market failure' is said to exist and the government will intervene.


 * [[file:1. Market Failure and Economic Efficiency.docx]]
 * [[file:2. Different types of externalities- intro.docx]]
 * [[file:3. Market failure- externalities- diagrammatic analysis.docx]]
 * [[file:4. Types of market failure.doc]]
 * Government response to market failure: [[file:5. Government response to market failure caused by externalities.docx]]
 * Research exercise on government response to market failure:[[file:7. Government response to market failure- research task.docx]]

Other sources of market failure
Common access goods, resource depletion and sustainability:

If clean air is a social utopia why not ban all cars/factories/power plants in Shanghai/Hong Kong/Los Angeles?. Follow this link for a look at this question from an Economist's perspective:Economics USA - Pollution & the environment. Use this template to help you make notes:
 * China's Carbon Trading Scheme- information and question sheet: [[file:10. China's carbon trading scheme- questions-2.doc]]
 * For a critical look at the Cap and Trade Scheme in the US check out this movie: Cap and Trade



**Market failure assessment: ** Market failure revision: Multiple Choice review: For SL students, the microeconomics syllabus section will be assessed in Paper 1, an extended response paper and for HL students, the section will be assessed in Paper 1 (also an extended response paper) and Paper 3.


 * Examples of extended response questions related to Market failure- [[file:Essay questions.doc]]
 * Mark scheme for Qs 3 & 5: [[file:Answer to essays #3 & 5.docx]]
 * Example & mark scheme : Negative externalities
 * <span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 110%;">Paper 1 (extended response) assessment criteria: [[file:murphonomics/Paper 1- Extended response (essay) Part a).pdf|Paper 1- Extended response (essay) Part a).pdf]] & [[file:murphonomics/Paper 1 Extended response (essay) Part b).pdf|Paper 1 Extended response (essay) Part b).pdf]]

<span style="font-family: 'Palatino Linotype','Book Antiqua',Palatino,serif; font-size: 110%;">Answers to 2016 test:

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