Economics Internal- Market Failure Positive Externalities of Production Firms undersupplying training for workers (wait for slide change or press space bar for Information) By Matt Hamilton

Graph for Market Failure

Explanation for Market Failure At the moment employers undersupply their employees with work place skills. They do this so their employees only have one skill and will stay in their job and not want to leave. This way firms don’t have to train new employees which increases their costs of production. If firms trained their employees more then New Zealand's workforce would have more skills and be able to get more jobs so our Unemployment would decrease and with more disposable income in the economy New Zealand's spending will increase which increases consumer spending and Aggregate Demand and makes the economy better off with increased output.