Economics Resources

Market Failure

  • Using appropriate examples, distinguish between a public good and a merit good. 
  • Discuss the view that the economic activity of the government should be restricted to the provision of public goods.
  • With the aid of examples, explain the terms ‘private benefit’ and ‘social benefit’.
  • Discuss whether the existence of traffic congestion in cities might be considered as evidence of market failure. 
  • How do merit and demerit goods differ from public goods?
  • Discuss whether it is necessary to have government intervention in order to achieve an efficient allocation of resources.
  • Discuss what policies a government might adopt to achieve a more efficient allocation of resources where merit and demerit goods exist in markets.