Externalities and Market Failure
223 Slides on Externalities and Market Failure:
Market Mechanism
Free Market
Why markets fail
Meaning of Market Failure
Externalities – Defining Externality
Private and Social Costs
Private and Social Benefits
The Problem Created by Externalities
Cost-Benefit Analysis (CBA)
Spillover Effect
Merit Goods, Demerit Goods, and Information Failure
Value-Free Economics
Moral Hazard
Adverse Selection
Public Goods
Quasi-Public Goods
Private Goods
Excludable vs. Non-excludable Goods
Rival vs. Non-rival Goods
Government Intervention
Regulation
Price Controls and Price stabilization