Market Failure

Август 11, 2022

Содержание

2. Previous Lesson Recap 15/04/17 Sonali The concepts/terms learnt: Inefficiency Misallocation of resources (2 min)
3. 15/04/17 Sonali Activity 1 (6.47 min)
4. Topic of the Day Market Failure Market failure occurs when freely-functioning markets, fail to deliver an
5. Group Division GROUP 1: Animal World (3- 4 members) GROUP 2: Plant World (3- 4 members)
6. Activity 2-Critical Thinking (25 min) GROUP WORK- PRESENTATION : GROUP DISCUSSION Preparation Time: 10 min Presentation:
7. Reflection What did you learn today ? Чему вы научились сегодня?
8. Unit: 11.4B-2 15/04/17 Sonali Externalities Spill over effect The cost or benefit that affects a party
9. Previous Lesson Recap 15/04/17 Sonali The concepts/terms learnt: Inefficiency Misallocation of resources Market Failure (2 min)
10. Word Search 15/04/17 Sonali Positive externalities/ External benefits Negative externalities/ External costs Private Cost Private Benefits
11. Public Goods 15/04/17 Non- Excludability Non- Rivalry Free rider problem +
12. Formula 15/04/17 Sonali Marginal Social Benefit = Marginal Private Benefit + External Benefit MSB = MPB
13. Negative Externalities 15/04/17 Sonali A manufacturer of computers which emits pollutants into the atmosphere, the free
14. Positive Externalities 15/04/17 Sonali vaccination for Small pox: The MPB (for example, society as a whole
15. Group Division GROUP 1: GROUP 2: GROUP 3: GROUP 4:
16. Activity 2-Critical Thinking (25 min) GROUP WORK- PRESENTATION : GROUP DISCUSSION Preparation Time: 10 min Presentation:
17. Unit: 11.4B-3 15/04/17 Sonali Government Intervention
18. Previous Lesson Recap 15/04/17 Sonali The concepts/terms learnt: Negative externality Positive externality Taxes Subsidies (2 min)
19. Pigovian tax to correct Negative externalities 15/04/17 Sonali A tax shifts the marginal private cost curve
20. Property Rights to correct Negative externalities 15/04/17 Sonali Extend property rights so that third parties can
21. Subsidies to encourage Positive Externalities 15/04/17 Sonali C P O SUBSIDY
22. 15/04/17 Sonali Subsidies to encourage Positive Externalities Subsidy per unit = P0 -P2 The supply curve
24. Скачать презентацию

Слайд 2

Previous Lesson Recap
15/04/17
Sonali
The concepts/terms learnt:
Inefficiency
Misallocation of resources
(2 min)

Слайд 3

15/04/17
Sonali
Activity 1
(6.47 min)

Слайд 4

Topic of the Day

Market
Failure
Market failure occurs when freely-functioning markets, fail

to deliver an efficient allocation of resources.

The social costs of producing the good or service (all of the opportunity costs of the input resources used in its creation) are not minimized, and this results in a waste of some resources.

Слайд 5

Group Division
GROUP 1:
Animal World
(3- 4 members)
GROUP 2:
Plant World
(3- 4 members)
GROUP

3:
Human world
(3- 4 members)

Слайд 6

Activity 2-Critical Thinking
(25 min)
GROUP WORK- PRESENTATION :
GROUP DISCUSSION
Preparation Time: 10

min
Presentation: 15 min

Табыс критерийлері:

ASSESSMENT
(CRITERIA)

Explain how the given areas are affected due to environmental destruction.
Give real world examples to support your answer.

Слайд 7

Reflection
What did you learn today ?
Чему вы научились сегодня?

Слайд 8

Unit: 11.4B-2
15/04/17
Sonali
Externalities
Spill over effect
The cost or benefit that affects a party

(third party) who did not choose to incur that cost or benefit.

Слайд 9

Previous Lesson Recap
15/04/17
Sonali
The concepts/terms learnt:
Inefficiency
Misallocation of resources
Market Failure
(2 min)

Слайд 10

Word Search
15/04/17
Sonali
Positive externalities/ External benefits
Negative externalities/ External costs
Private Cost
Private Benefits
Social Cost
Social

Benefits
Public Goods
Merit Goods
Property Rights
Factor immobility

Слайд 11

Public Goods
15/04/17
Non- Excludability
Non- Rivalry
Free rider problem
+

Слайд 12

Formula
15/04/17
Sonali
Marginal Social Benefit = Marginal Private Benefit + External Benefit
MSB =

MPB + XB

MSC = MPC + XC

External Benefit = Marginal Social Benefit > Marginal Private Benefit

Marginal Social Cost = Marginal Private Cost + External Cost

External Cost = Marginal Social Cost > Marginal Private Cost

XC = MSC > MPC

XB = MSB > MPB

Слайд 13

Negative Externalities
15/04/17
Sonali
A manufacturer of computers which emits pollutants into the atmosphere,

the free market equilibrium will occur when marginal private benefit = marginal private costs, at output Q and price P.
The market equilibrium is at point A. However, if we add external costs, the socially efficient output is Q1, at point B.

MSB at A is £5m,
MSCat C is £10m
net welfare loss = £10m - £5m = £5m
Area for welfare loss = ABC.
Therefore, in terms of welfare, markets over-produce goods that generate external costs.

Слайд 14

Positive Externalities
15/04/17
Sonali
vaccination for Small pox:
The MPB < MSB
(for example,

society as a whole is increasingly protected from smallpox by each vaccination, including those who refuse to participate).

The market will end up at price P and quantity Q as before, instead of the more efficient price P1 and quantity Q1 These latter again reflect the idea that the marginal social benefit should equal the marginal social cost, i.e., that production should be increased as long as the marginal social benefit exceeds the marginal social cost. The result in an unfettered market is inefficient since at the quantity Q1, the social benefit is greater than the societal cost, so society as a whole would be better off if more goods had been produced.

Слайд 15

Group Division
GROUP 1:
GROUP 2:
GROUP 3:
GROUP 4:

Слайд 16

Activity 2-Critical Thinking
(25 min)
GROUP WORK- PRESENTATION :
GROUP DISCUSSION
Preparation Time: 10

min
Presentation: 15 min

Табыс критерийлері:

ASSESSMENT
(CRITERIA)

Identify the private benefits, external benefits and social benefits from education and health care.

Identify the private costs , external costs and social costs from overfishing & smoking.

Слайд 17

Unit: 11.4B-3
15/04/17
Sonali
Government Intervention

Слайд 18

Previous Lesson Recap
15/04/17
Sonali
The concepts/terms learnt:
Negative externality
Positive externality
Taxes
Subsidies
(2 min)

Слайд 19

Pigovian tax to correct Negative externalities
15/04/17
Sonali
A tax shifts the marginal private

cost curve up by the amount of the tax. If the tax is placed on the quantity of emissions from the factory, the producers have an incentive to reduce output to the socially optimum level. If the tax is placed on the percentage of emissions per unit of production, the factory has the incentive to change to cleaner processes or technology

Слайд 20

Property Rights to correct Negative externalities
15/04/17
Sonali
Extend property rights so that third

parties can negotiate with those individuals or organisations that cause the externality.
British economist and Nobel Prize winner, Ronald Coase argued that the establishment of property rights would provide an efficient solution to the problem of externalities.
As long as one party can establish a property right, there will be a bargaining process leading to an agreement in which externalities are taken into account.

For some negative externalities, such as, pollution, if somebody had ownership rights to the air, sea etc., then they could take the polluters to court for compensation. The provision of property rights would give individuals ownership rights on the sea, air etc.,

Слайд 21

Subsidies to encourage Positive Externalities
15/04/17
Sonali
C
P
O
SUBSIDY

Слайд 22

15/04/17
Sonali
Subsidies to encourage Positive Externalities
Subsidy per unit = P0 -P2
The supply

curve shifts to S2 and price falls from P1 to P2.
People will now consume more, the quantity increases from Q1 to Q2.
Hence, the economy will shift from Q1: Market optimum quantity MPC = MPB to Q2 = Social Efficiency: because MSC = MSB

Market Failure

Содержание

Previous Lesson Recap15/04/17SonaliThe concepts/terms learnt:InefficiencyMisallocation of resources(2 min)

15/04/17Sonali Activity 1 (6.47 min)

Topic of the Day MarketFailureMarket failure occurs when freely-functioning markets, fail

Group DivisionGROUP 1:Animal World(3- 4 members)GROUP 2:Plant World (3- 4 members)GROUP

Activity 2-Critical Thinking(25 min)GROUP WORK- PRESENTATION : GROUP DISCUSSIONPreparation Time: 10

Reflection What did you learn today ? Чему вы научились сегодня?

Unit: 11.4B-215/04/17SonaliExternalitiesSpill over effectThe cost or benefit that affects a party

Previous Lesson Recap15/04/17SonaliThe concepts/terms learnt:InefficiencyMisallocation of resourcesMarket Failure(2 min)

Word Search15/04/17SonaliPositive externalities/ External benefitsNegative externalities/ External costsPrivate CostPrivate BenefitsSocial CostSocial

Public Goods15/04/17Non- Excludability Non- Rivalry Free rider problem+

Formula15/04/17SonaliMarginal Social Benefit = Marginal Private Benefit + External BenefitMSB =

Negative Externalities15/04/17SonaliA manufacturer of computers which emits pollutants into the atmosphere,

Positive Externalities15/04/17Sonali vaccination for Small pox: The MPB < MSB(for example,

Group DivisionGROUP 1:GROUP 2:GROUP 3:GROUP 4:

Activity 2-Critical Thinking(25 min)GROUP WORK- PRESENTATION : GROUP DISCUSSIONPreparation Time: 10

Unit: 11.4B-315/04/17SonaliGovernment Intervention

Previous Lesson Recap15/04/17SonaliThe concepts/terms learnt:Negative externalityPositive externalityTaxesSubsidies(2 min)

Pigovian tax to correct Negative externalities15/04/17SonaliA tax shifts the marginal private

Property Rights to correct Negative externalities15/04/17SonaliExtend property rights so that third

Subsidies to encourage Positive Externalities15/04/17SonaliCPOSUBSIDY

15/04/17SonaliSubsidies to encourage Positive ExternalitiesSubsidy per unit = P0 -P2The supply

Похожие презентации

Previous Lesson Recap
15/04/17
Sonali
The concepts/terms learnt:
Inefficiency
Misallocation of resources
(2 min)

15/04/17
Sonali
Activity 1
(6.47 min)

Topic of the Day

Market
Failure
Market failure occurs when freely-functioning markets, fail

Group Division
GROUP 1:
Animal World
(3- 4 members)
GROUP 2:
Plant World
(3- 4 members)
GROUP

Activity 2-Critical Thinking
(25 min)
GROUP WORK- PRESENTATION :
GROUP DISCUSSION
Preparation Time: 10

Reflection
What did you learn today ?
Чему вы научились сегодня?

Unit: 11.4B-2
15/04/17
Sonali
Externalities
Spill over effect
The cost or benefit that affects a party

Previous Lesson Recap
15/04/17
Sonali
The concepts/terms learnt:
Inefficiency
Misallocation of resources
Market Failure
(2 min)

Word Search
15/04/17
Sonali
Positive externalities/ External benefits
Negative externalities/ External costs
Private Cost
Private Benefits
Social Cost
Social

Public Goods
15/04/17
Non- Excludability
Non- Rivalry
Free rider problem
+

Formula
15/04/17
Sonali
Marginal Social Benefit = Marginal Private Benefit + External Benefit
MSB =

Negative Externalities
15/04/17
Sonali
A manufacturer of computers which emits pollutants into the atmosphere,

Positive Externalities
15/04/17
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vaccination for Small pox:
The MPB < MSB
(for example,

Group Division
GROUP 1:
GROUP 2:
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GROUP WORK- PRESENTATION :
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Previous Lesson Recap
15/04/17
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The concepts/terms learnt:
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15/04/17
Sonali
A tax shifts the marginal private

Property Rights to correct Negative externalities
15/04/17
Sonali
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O
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