Public Policies Used To Solve Market Failure Economics Essay

Public Policies Used To Solve Market Failure Economics Essay Market is defined as a group of buyers and sellers of a particular good or service. There are many different types of markets such as stock market, currency market and more. Market is efficient when the market is perfectly competitive. If a market is not perfectly competitive, the market failure will occur. Market failure also occurs when the allocation of resources in a free market is inefficient. Market failure occurs when the market is not in perfectly competitive. There are many reasons to cause market failure. The main causes of market failure are: a) Negative Externalities Externalities are defined as the uncompensated impact of one persons actions on the well-being of a bystander. Negative externality such as the effect of environmental pollution can cause the marginal social cost(MSC) of production to exceed the marginal private cost(MPC) according to the diagram below: In the process of production, the firms will cause the pollution of the environment. The pollution is bad for public health so that the marginal social cost(MSC) is exceed the marginal private cost(MPC). The optimum of production is at Qs, MSB is equal to MSB. The firms will produce goods at Qp, where MPB is equal to MPC. The excess of production not only does not promote the public welfare but also causes more pollutions to the environment. As a result, the market will go inefficient. b) Positive Externalities The positive externalities such as the provision of education and healthcare can cause the marginal social benefit(MSB) of consumption to exceed the marginal private benefit(MPB) according to the diagram below: In a free market, the consumption will be at Qp where the private benefit equals to the private cost. However, this is socially inefficient because the social benefit is exceed to the social cost. Therefore, that is under-consumption(Qs-Qp) of the positive externality. The social efficiency will occur at Qs where the social cost equals social benefit. c)Merit and Demerit goods Merit good is a good that people do not realise its true benefit such as the people underestimate the benefit of education. The examples of merit goods are education and healthcare. These goods usually have positive externalities. Therefore, there will be a under-consumption of merit goods in a free market. Demerit good is a good that people do not realise the costs of doing something such as smoking and drugs. These goods usually have negative externalities. Therefore, there will be over-consumption of demerit goods in a free market. d)Public goods The private sectors in free markets cannot profitable supply to consumers public goods that are needed to meet peoples demand. So that the public goods are generally provided by government. e)Monopoly Power Market that controlled by monopoly can cause under-production and higher prices than would exist under condition of competition. f)Factor immobility Factor immobility will cause unemployment hence productive inefficiency. When market fails, the market will fall into position of inefficiency. It may cause unfair distribution of income and property to the public. Many firms increase the quantity of goods supplied in order to earn more profit. It may cause the pollution in the environment as the firms are not willing to protect the environment whenever they produce goods. Besides that, unemployment will occur because of the exclusion of labor by the machines when the firms are able to improve the productivity. There will be also an undersupply of public goods. The private sectors are not willing to produce public goods as the consumers do not need to pay for these goods so that they will not earn profit from providing the public goods. To address these public issues, the government will execute some policies to solve the market failure such as imposing taxes on negative externalities. In the diagram above, the marginal social cost(MSC) of production will exceed to the marginal private cost(MPC). The government imposed the taxes to the sellers and the imposition of taxes will increase the production cost of the sellers. Then, the supply curve(PMC) will shift to the left. The quantity of production will decrease from Qp to Qs where the optimum output is and the social welfare will be maximized. New Mexico Legislature is supposed to increase the state cigarette tax from 75 cents to $1.66 per pack this year. The purpose of imposing the tax is to reduce the tobacca use and save lives. The increasing of tax will discourage people from smoking. Increasing the cigarette tax is one of the most effective ways to reduce smoking, especially among kids. From the diagram above, the production of tobacca of marginal social cost(MSC) is exceed to the marginal private cost(MPC) and the output of tobacca of the sellers is at Qp. New Mexico Legislature imposed the cigarette tax to the output of tobacca of sellers. So that, the supply curve(S=PMC) of tobacca will shift to right. The output of tobacca will decrease from Qp to Qs as the tobacca tax will increase the cost of production of tobacca. As a result, the supply curve of tobacca will move to left and equals to marginal social cost(MSC). At this moment, the optimum output of tobacca is at Qs. The imposition of cigarette tax will reduce the output of tobacca and discourage people from smoking. Taxes on negative externalities will raise the revenue for the government and reduce the pollution of environment. The second policy that can overcome the market failure is to provide subsidy on positive externalities. The government provides subsidy to the firms to pay part of cost for them to encourage more production. From the diagram above, the production of marginal social benefit(MSB) is exceed to the marginal private benefit(MPB). The government provided subsidy(P2-P1) to the firm to decrease their cost of production. As a result, the firm will increase the output from Qp to Qs. Then, the social welfare will be maximized. For example, Malaysia government plans to provide a subsidy of RM30bil to enhance primary and secondary school education nationwide which is one of the plans of Budget 2010. From the diagram above, when our government provides a subsidy of RM30bil on education, the operating cost of school will decrease. Then, the school will have enough capital to build more facilities and provide more educational plans from Qp to Qs for the students. The students will get more benefit from studying. At this moment, the social welfare will keep increasing till the marginal social benefit(MSB) equals to marginal social cost(MSC). The third policy is to change the property right. This will happen when the government gives the property rights to certain people such as the fishermen could be given the property rights to a river. When negative externalities occurred, the owners of property could sue a company who caused damage or pollution such as the fishermen can sue a chemical factory which polluted the river. It may charge some social costs to the chemical factory. The government pursued this policy to reduce the pollution of environment so that the negative externalities could be eliminated. In addition, the government will also impose the laws and regulation to prohibit the unhealthy behaviour of people such as legalizing the age for smoking and banning on drunk driving. The laws and regulations must be simple and easy to understand to the public. Due to a reducing in negative externalities, the marginal social cost will decrease. So that, imposing the laws and regulations is also a policy to overcome the market failure. For example, in New Zealand, it is illegal to sell tobaccos and cigarettes to person aged uner 18. It is also illegal for a person over 18 to give a person under 18 cigarettes or tobaccos in a public place. Another example is sales of tobacco to person aged under 18 are illegal in all Australian states. The purpose of legalizing the smoking by both governments is to reduce the consumption of tobaccos. It may help to decrease the negative externalities for improving efficiency of the market. Finally, the other policy is to give the pollution permit. The government can give a pollution permit to a firm to limit his output. The more the firm produce, the more polluted the environment is. Therefore, the marginal social cost will keep increasing and market failure will occur. The government will give the pollution permit to the firm such as limiting the firm to produce only 100 units carbon dioxide per year. As a result, there is an incentive to pollute less and the negative externalities will be eliminated. Conclusion The public policies implemented by the government can successfully solve the market failure. The main causes of market failure is the externality. It can divide into negative externality and positive externality. Government will impose the tax to the firms to decrease their output as every unit of good they produce will cause the pollution of environment. The implimentation of this public policy can reduce the pollution of environment but also to eliminate the negative externalities for efficient market. Secondly, the government will also provide subsidy to the firms. With this policy, the production cost of the firms will decrease and their output will increase. The market will be efficient as the subsidy on positive externalities forces the marginal social cost equals to the marginal social benefit. Thirdly, the government will implement the policy of changing the property rights. By giving the property rights, the owner of the property can sue a company which caused pollution to their property such as the lands. It may help to reduce the pollution of the environment and eliminate the negative externalities. So that, the market failure can be overcome. The government will also impose the laws and regulations to prohibit people from the unhealthy behaviour such as smoking and taking drug. The implementation of this policy can effectively increase the social benefit. So that, the market failure will turn into an efficient market. Lastly, the government will also give the pollution permit to the firm. This policy can limit the output of carbon dioxide of the firm. It can reduce the negative externality of air pollution. As a result, the market will be efficient by reducing the negative externalities. For archieving an efficient market, the government will implement the public policies when market failure occurred although the government needs to spend a high cost on them.

I’M a Unique Individual

Ronald Mouton Dr. Steven Dolgin ENG 101-111326 28 January 2013 â€Å"I’m a unique individual† I believe I’m unique because I was a Marine and Marines make up . 06% of the population in the United States of America. Being in the Marines changed me and the way I think, I went from undisciplined to disciplined, cowardly to courageous. I learned how to lead people, train people, and inspired people. I know what it’s like to go to war, and to not have a break from work for 8 months straight.I know what it’s like to work 16-20 hour days in 110 degrees in the summer and 0 degrees days in the winter. I’ve had 2,000 pounds of vehicle armor (belly pan) fall on my finger and didn’t break one. The time I spent in Afghanistan was an experience that is hard to explain. It was good, bad, fun, miserable, thrilling, and boring. Life in Afghanistan was work every day of the week, long hours with no incentives to work hard, but you worked hard anyways.Th e only time we didn’t work hard was when the sand storms hit because you could not see an arms length in front of you. It’s impossible to breath in the storm. The sand is everywhere and gets all over you. The weather depending on the time of year could be hot as hell or cold as a Michigan winter day. I grew up in an environment that was bad, but not as bad as it could have been. My father was abusive and a drunk and still is a drunk. I saw in him everything I never wanted to be and I set out to do that by finishing school and joining the military.I wanted the intangibles the Marines offered me and they gave to me, but it was not easy and it’s not for the weak willed. I fought through the despair that happens in boot camp. I never quit even after I broke my thumb on the first day of the tree day crucible event which I had to complete in order to become a Marine. I see myself as a warrior I have the training of a warrior but I dislike confrontation and shy away fr om it. I’ll do what I have to do in order defuse the situation, if my words don’t work my fist will.I also see myself as an intellectual. I enjoy using my mind to solve problems. I believe common sense is the most important intangible you can have; I’ve met book smart people that couldn’t think critically or independently. I do believe you can be unique and have many standard traits, for instance like you are born in standardized hospitals, you go to standardized schools, eat standardized food, and watch standardized TV. Even with all the standardized things around us today, we can still take our individual experiences and become unique.

Parenting Skills 5.09

Parenting Skills 5. 09 Lab Questions (A) Temper Tantrums 1. How can parents avoid temper tantrums? Parents can avoid temper tantrums by having a plan for when they are put in this situation. 2. What are the A, B, C’s? The A is the attribute that you would want your child to acquire. The B is the behavior that you want to go along with the attribute. And C is compassion that you want your child have to go along with their behavior. 3. Do you think using consequences and following the ABC process will help shape a child’s behavior? Why or why not?I do believe that using consequences and following the ABC process will help shape a child’s behavior. As long as the consequence is related to the offense it will make a difference. The child will realize that you are serious and will want the consequences to stop; thus molding the behavior. (B) Developing Language Skills in Babies 1. What are some of the reasons why people may not talk to babies as much today as they use d to? People may not talk to babies as much today as they used to because the family structure has changed and everyone is too busy. 2. Why do you think developing language skills is important for a child?Developing language skills is important for a child because it affects their ability to make friends and be sociable and emotionally well fed beings. 3. What are some of the ways that parents can encourage the development of language skills? Parents can encourage the development of language skills by communicating with their child and listening to them so that they can practice. (C) The Importance of Bedtime Reading 1. How many parents never read to their children at bedtime according to the study? What might prevent parents from reading to children? According to the study one in ten parents never read to their children.A parent’s busy schedule normally prevents them from reading to their children. 2. What are some of the benefits of reading to children? Include infancy thro ugh young school age children. Reading helps to improve concentration and listening skills in children. Without these two skills a child will find it very hard in school to concentrate effectively. 3. Did your parents or other caregivers read to you as a child? What effect do you think this had on you? My mother read to me on numerous occasions as a child. I believe that this is the reason why I love books and I have a relatively high vocabulary.

A Reflection about Eve and Adam Essay examples - 536 Words

A significant issue put forward in this contention is a re-examination of the significance of the name Adam, (â€Å"Adham† in Hebrew). Although some use â€Å"Adham† as a correct name for the male creation of God, Dr. Trible informs us that the phrase â€Å"Adham† can be utilised as a generic term for humankind – â€Å"adham is an androgynous term; one creature incorporating two sexes.† Secondly, the scribe points out that the creation of woman was a divine proceed rather than a demand by Adam. She extracts Genesis 2:18, in which God concludes that Adam needs a â€Å"helper fit for him.† The focus being on the phrase â€Å"helper† (â€Å"ezer† in Hebrew). Trible points out that the term â€Å"ezer† is a relational one expressing a beneficial connection and not one of†¦show more content†¦Following this line, male exegetes have claimed that the woman also falls under the dominion of the man as an outcome the label he assigns her in Genesis 2:23. However, Trible claims that the normative building for calling in Hebrew engages the word combination of â€Å"to call his/her name† pursued by the title. In evaluating the validity of this contention, it would be necessary to make a further study of the usage of the verb ‘qara’ (to call), encompassing common phrase blends. Trible strengthens her argument by pointing out that ‘ishshah’ is not a name. Rather, ‘adham’ only calls the woman’s name â€Å"Eve† in Genesis 3:20, after The Fall, and in this way claims dominance over the creation that had until this issue been his equal. For its time, Trible’s contentions were groundbreaking and effective in achieving her aim. While there was room for question and debate surrounding her contentions, she opened the door for a fresh gaze at the scriptures and caused persons to question assumptions that they conveyed with them to the text. The fact that this essay is still being utilised in seminaries and universities today attests to both the innovative nature of Trible’s work and also to the time-tested efficacy of her arguments. Further, detractors of Trible’s analysis may propose that the man’s poetic recount of woman as â€Å"bone of my bone, flesh of myShow MoreRelatedAnalysis Of John Milton s Paradise Lost 1678 Words   |  7 PagesLost Paradise Lost is an epic account of the creation and subsequent fall of Adam and Eve. Borrowing from the book of Genesis, Milton chronologically details the events leading up to Satan’s fall, the creation of the universe, the temptation of Adam and Eve, and their ultimate loss of their creator’s favor. 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