Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
SECTION 1 MANAGING THE ECONOMY GCSE ECONOMICS: UNIT 12 The economy at work Market Failure SECTION 1 MANAGING THE ECONOMY Lesson Objectives • Understand what is meant by market failure • Produce a short 5 minute lesson on one of the types of market failure SECTION 1 MANAGING THE ECONOMY Market Failure • In today’s lesson we will be looking at Market Failure • Before understanding how a market fails it’s important you know what a market is! • Write down your own definition of a market SECTION 1 MANAGING THE ECONOMY What is a market? • A market is a place where buyers and sellers come together to conduct a transaction together • Markets left to operate freely have a good chance of operating efficiently • By operating efficiently, business costs can be kept low in order to improve profits • In this way, the market ensures that the resources are allocated efficiently SECTION 1 MANAGING THE ECONOMY What is market failure? • Market failure occurs when markets fail to allocate resources efficiently • This means the prices of goods and the quantities produced are not at the level that ensures that economic welfare is kept as high as possible • For example, if a market fails, some goods may be under-produced or not even produced at all SECTION 1 MANAGING THE ECONOMY Types of market failure • There are a number of different types of market failure, such as: – – – – – – Merit goods/De-merit goods Public goods Imperfect competition e.g. monopoly Positive externalities/ Negative externalities Unequal distribution or income/wealth Immobility of factors of production (e.g. immobility of labour) SECTION 1 MANAGING THE ECONOMY Types of market failure: Over to you • You have 15 minutes to research your chosen type of market failure • Produce a handout which includes the following; – a clear definition of your type of market failure – an explanation as to why it occurs – examples of your type of market failure in the real world • You will present your findings to the other groups SECTION 1 MANAGING THE ECONOMY Match the keyword to the expression which fits best Market Failure There is enough for everyone Non-rival You buy it….no you buy it! Non-excludable Too much or too little, but never just enough Free-rider You can’t stop me SECTION 1 MANAGING THE ECONOMY What do you see? SECTION 1 MANAGING THE ECONOMY What do you see? SECTION 1 MANAGING THE ECONOMY What do you see? SECTION 1 MANAGING THE ECONOMY What do you see?