Presentation on theme: "Click to begin. Public Goods Externalities Unfair Distribution Of income Resource Market Failures 10 Point 20 Points 30 Points 40 Points 50 Points 10."— Presentation transcript:
Public Goods Externalities Unfair Distribution Of income Resource Market Failures 10 Point 20 Points 30 Points 40 Points 50 Points 10 Point 20 Points 30 Points 40 Points 50 Points 30 Points 40 Points 50 Points Monopolies
What makes public goods market failures? A.Incentive to provide public goods by the public sector B.The government is inefficient and cannot provide public goods C.Free rider problem D.Businesses are making too much profit from the consumer demand that they are not meeting.
C. Free rider problem The private sector does not have any incentive to produce these goods since the free-rider problem makes these goods unprofitable.
Describe the 3 different types of taxes and identify which one of them reduces income inequality.
A progressive tax (reduce inequality) takes a higher percentage of income from high income groups. A proportional tax takes the same percent of income from every income group. A regressive tax takes a higher percentage of income from low income groups.
When supply is inelastic and demand is elastic, who pays more of the tax? When supply is elastic and demand is inelastic, who pays more of the tax? What if demand is perfectly elastic?
The sriracha company produced the sriracha sauce without realizing that the foul smell was disturbing the people living near the factory. What type of externality is this, which curve (demand or supply) will show this externality and how should the government react?
Negative externality that shifts the supply/MPC to the left (becomes MSC) & the government should tax producers
The polo market accidentally became a monopoly and is making a profit. Draw and label a graph of a monopoly and explain why it is a market failure. TEAM TASK
They are not productively or allocatively efficient. They charge too high and produce too little.
If a good creates a positive externality, what should the government do (tax or subsidize) and who should it be placed on (producers or consumers) so that the socially optimal price is the lowest possible?
Timed Task Place the following items in a table to demonstrate which are pure public goods and pure private goods: A.National defense B.Street lights C.Hair cut D.The Hudson River E.Fishing F.Hot dogs G.Fireworks H.Computers
Shared consumptionRivalry NonexclusionNational defense Street light Fireworks Hudson River Fishing ExclusionHot dog Haircut Computers
How long was Kim Kardashian married to Kris Humphries?