1. Chapter 20 Section 1

2. Providing Public Goods What Are Private Goods?  Private Goods- Goods that, when consumed by one individual, cannot be consumed by another (clothes and food). What Are Public Goods?  Public Goods- Goods that can be consumed by one person without preventing the consumption of the good by another (public parks, museums, and highways) - for everyone, provided by the Gov’t

3. Dealing with Externalities  Externality- The unintended side effect of an action that affects someone not involved in the action (end-of-year bonus) - More money, more sales  Positive Externalities-Good roads, space programs. (Benefit more people)  Negative Externalities- Dumping chemicals into a river. -Action has harmful side effects

4. Maintaining Competition Markets work best when there are large numbers of buyers and sellers  Monopoly- A sole provider of a good or service (no competition) Antitrust Laws  Antitrust laws- Laws to control monopoly power and to preserve and promote competition  Sherman Antitrust Act- (1890)This law banned monopolies and other forms of business that prevent competition (break up Standard Oil Company)

5. Antitrust Laws Continued  Clayton Act- (1914) prohibited or limited a number of business practices that lessened competition. https://www.youtube.com/watch?v=MeSFawZ_qNA Mergers  Mergers- A combination of two or more companies to form a single business (can threaten competition) Regulating Market Activities  Natural Monopolies- A market situation in which the costs of production are minimized, or lessened, by having a single firm produce the product (natural gas and water)

6. Advertising and Product Labels  Food and Drug Administration (FDA)- Deals with the purity, effectiveness, and labeling of food.  Federal Trade Commission (FTC)- Deals with false advertising Product Safety  Consumer Product Safety Commission Recall- a company pulls a product off the market (safety) https://www.youtube.com/watch?v=KONkQx0wm1c

7. Cause: Antitrust Laws Effect: