A Report On The Market Failure - 1063 Words

ï  ¬ Market failure:A condition in which a market does not effecintly allocate resources to achieve the greatest possible consumer satisfaction. As a result of market failure, government intervene in the economy. (John O. Ledyard ,2008) Eg: Because of the price of apple was increased last year, this year many people to plant the apple tree,and the number of apple sharply increased. So the supply exceeds demand, and the price sharply decreased. Government: An important function of government is to communicate its Macro economic objectives. A principal communication tool used to communicate the economic intentions of the government is budget. (Aidan R. Vining, 2004) Merit goods A merit goods often has positive externalities associated with it.†¦show more content†¦Eg: The State Grid Corporation China is belong to the imperfect competition. The State Grid Corporation China almost monopoly the whole power transmission of China. The government is likely to intervene when one firm has a large degree of market power. They monopoly the market for infrastructuren and the national safety. In economics the team market concentration is used to describe the degree of monopoly. Externalities An externality refers to the uncompensated impact of one person’s actions on the well-being of a bystander. That would lead to the resources allocation poor efficiency. (George,2000) Eg: When the factory began to production,and that will make the environment pollution. The government use their power to adjust, and coordinate the problems in social. The government should realize and protect the basic interests to ensure the social equity. ï  ¬ Environment The environmental pollution problem is a negative externalities, and need the government to take part in it. But the government policy failure and environment failure would lead to a heavy environmental pollution problems. (McCormick, John,2001) And the environmental pollution is a main problems in social, the government should to keep the environment is clean, that could make the economic development. Air pollution is the introduction of particulates, biologicalShow MoreRelatedEco/365651 Words   |  3 PagesWhat is an externality? Provide at least three examples. How does one of the examples you provided affect the market outcome? What is the role of government in addressing the implications of an externality you provided as an example? Is it possible that a government’s solution to a market failure would worsen the failure? Explain your answer. Externality is defined as an effect of a decision on a third party not taken into account by the decision maker. There are two types of externalities beingRead MoreThe Bank Of Japan s Monetary Stimulus Program Essay954 Words   |  4 Pagesmercy of external market forces. 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