When have you felt ripped off as a consumer? Notebooks Today!! When have you felt ripped off as a consumer?

WHY DO MARKETS FAIL??? Question: The Chevy Engine Plant owners contact the Town Board and insist on a tax break or they would be forced to close the plant. As a Town official, would you give the break or refuse it? Why?

I. Inadequate Competition Results from decreases in competition because of mergers and acquisitions A large business can exert its economic power over politics

Question: What resources would you check to find out the necessary information for buying a car (either used or new)?

II. Inadequate Information Consumers, businesspeople, and government officials must be able to obtain the necessary facts before all economic transactions!! The Internet has almost eliminated this market failure

Question: What would be a positive result and a negative result of a Super Wal-Mart being built in Tonawanda?

III. Externalities Externalities are unintended side effects of an economic decision, may be either positive or negative Cannot know the true extent of the externality until after the decision has been made.

Question: What is an example of a product or service that everyone in the community uses, but does not necessarily have to pay for it?

IV. Public Goods Public goods are products everyone consumes, for the good of the whole Ex) parks, garbage, fire dept., nat’l defense, libraries, public education, etc. Private companies will not provide these because they cannot be denied if not paid for; hence gov’t provides them.

Need for Government: Fine bad ~ Help good Provide them, with tax money Failure Government Fix Externalities Public Goods Inadequate Information Imperfect Competition Fine bad ~ Help good Provide them, with tax money Truth-in-advertising laws / FDA / FCC Anti-Trust Laws / FTC / SEC / ICC

If Time: Top Ten!! Question: Which of the four failures described is the most largest obstacle (biggest problem) to our efficient economy? Why? If Time: Top Ten!!

Top Ten Most Common Words WRITTEN in the U.S. 10. For 9. It 8. Was 7. Is 6. To 5. In 4. A 3. And 2. Of The