8.1 Public Goods and Private Goods
8.2 Externalities
8.3 Public Policy to Promote Competition
8.4 Income Distribution
8.5 World Trade + Tariff
8.2 Externalities
8.3 Public Policy to Promote Competition
8.4 Income Distribution
8.5 World Trade + Tariff
| Unit 8: Market Failure & Role of Government |
| Steven M. Reff Economics Lecturer University of Arizona (2007 - 2016) The 2015 University of Arizona Five-Star Faculty Award |
| 2 hours - 3 hours max. |
| 6 - 12% of exam |
| CLEP® Principles of Microeconomics Course Preparation |
NOTE: This website is not a College Board® sponsored website. Everything on this
website can be used by teachers or students to get a better understanding of their
college-level Principles of Microeconomics course.
website can be used by teachers or students to get a better understanding of their
college-level Principles of Microeconomics course.
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• Unit 8: MARKET FAILURE AND THE ROLE OF GOVERNMENT (8–14%)
• Topic 8.1 Public and private goods
• Excludability, rivalry, and free-rider problem
• Provision of public goods
• Topic 8.2 Externalities
• Marginal social benefit and marginal social cost
• Positive externalities
• Negative externalities
• Remedies
• Topic 8.3 Public policy to promote competition
• Antitrust policy
• Regulation
• Topic 8.4 Income distribution
• Income inequality
• Lorenz curve and Gini coefficient
• Topic 8.5 World Trade + Tariff
• Topic 8.1 Public and private goods
• Excludability, rivalry, and free-rider problem
• Provision of public goods
• Topic 8.2 Externalities
• Marginal social benefit and marginal social cost
• Positive externalities
• Negative externalities
• Remedies
• Topic 8.3 Public policy to promote competition
• Antitrust policy
• Regulation
• Topic 8.4 Income distribution
• Income inequality
• Lorenz curve and Gini coefficient
• Topic 8.5 World Trade + Tariff
| eWorkbook Activities Interactive: |
| eTextbook Reading: |
| eVideos -- Short Videos: |
| eWorkbook Activities Interactive: |
| eTextbook Reading: |
| eREVIEW: Externalities |
| Topics 8.1 Public Goods and Private Goods |
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| Topics 8.2 Externalities |
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| eREVIEW: Income Distribution |
| Topics 8.4 Public Policy to Promote Competition |
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| Topics 8.4 Income Distribution |
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| eREVIEW: World Trade + Tariff |
| Topics 8.5 World Trade + Tariff |
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Government Regulations Affect on Supply and Demand Shown Below
Click on link for the U.S. Department of Justice Antitrust Law (1 page)
Government policies can affect the cost of production and the supply curve through taxes,
regulations, and subsidies.
In the short run, an increase in taxes and regulations, increases the cost of doing business
which decreases supply, and a decrease in government subsidies also decreases supply,
raising the price and decreasing the quantity sold.
In the short run, an increase in taxes and regulations, increases the cost of doing business
which decreases supply, and a decrease in government subsidies also decreases supply,
raising the price and decreasing the quantity sold.
regulations, and subsidies.
In the short run, an increase in taxes and regulations, increases the cost of doing business
which decreases supply, and a decrease in government subsidies also decreases supply,
raising the price and decreasing the quantity sold.
In the short run, an increase in taxes and regulations, increases the cost of doing business
which decreases supply, and a decrease in government subsidies also decreases supply,
raising the price and decreasing the quantity sold.
Regulations can also impact consumer preferences and choices, thereby influencing
demand. For example, health and safety regulations can make certain products more
desirable, increasing their demand. Similarly, environmental regulations can boost demand
for eco-friendly products while reducing demand for products deemed harmful to the
environment.
Trade policies can also impact demand. Tariffs, quotas, and other trade restrictions can
increase the price of imported goods, reducing their demand. On the other hand, free trade
agreements can lower the price of imported goods, potentially increasing their demand.
Furthermore, government policies can impact demand by affecting consumer confidence.
For instance, policies that promote economic stability and growth can boost consumer
confidence, leading to increased spending and demand. Conversely, policies that create
economic uncertainty can undermine consumer confidence, leading to decreased spending
and demand.
demand. For example, health and safety regulations can make certain products more
desirable, increasing their demand. Similarly, environmental regulations can boost demand
for eco-friendly products while reducing demand for products deemed harmful to the
environment.
Trade policies can also impact demand. Tariffs, quotas, and other trade restrictions can
increase the price of imported goods, reducing their demand. On the other hand, free trade
agreements can lower the price of imported goods, potentially increasing their demand.
Furthermore, government policies can impact demand by affecting consumer confidence.
For instance, policies that promote economic stability and growth can boost consumer
confidence, leading to increased spending and demand. Conversely, policies that create
economic uncertainty can undermine consumer confidence, leading to decreased spending
and demand.
Supply Curve:
Demand Curve:
| YOU MUST UNDERSTAND THE DIFFERENCES AMOUNT THE 4 EXTERNALITIES BELOW: |