51ºÚÁÏ

Lesson Objectives:At the end of the lesson, students should be able to:
Define market failure and the key terms associated with market failure: public good, merit good, demerit good, social benefits, external benefits, private benefits, social costs, external costs, private costs.
Causes of market failure - With respect to public goods, merit and demerit
goods, external costs and external benefits, abuse of monopoly power and factor immobility. Examples of market failure with respect to these areas only.
Consequences of market failure - The implications of misallocation of resources in respect of the over consumption of demerit goods and goods with external costs, and the under consumption of merit goods and goods with external benefits.
Note: diagrams of demand and supply relating to market failure are not required.
‘Class Activities’ and ‘Multiple Choice Questions’ with ‘Answers.’