1. Ch. 7.2 Notes : Market Failure

2. I.5 variables that cause a market system to fail…..

3. A. No Competition = Need companies to fight for your business 1. Allows prices to be reasonable 2. Collusion might occur = companies strategizing together to set price

4. B. Dishonesty with Information = cannot take advantage of investors/buyers Last weekend, 50, born Curtis Jackson, reportedly Tweeted to his 3.8 million followers, “You can double your money right now. Just get what you can afford” and “They are no joke get in now”. H&H closed at 39 cents on Monday, up 29 cents, netting Jackson’s shares the aforementioned $8.7 million. Later, Jackson apparently back-peddled a bit when he reportedly deleted his original posts and Tweeted, “I own HNHI stock thoughts on it are my opinion. Talk to financial advisor about it.” And “HNHI is the right investment for me it may or may not be right for u! Do ur homework.” Read more: http://entertainment.blogs.foxnews.com/2011/01/1 2/50-cent-sec-tweeting-twitter-stock-advice- tips/#ixzz1aV05MeNq http://entertainment.blogs.foxnews.com/2011/01/1 2/50-cent-sec-tweeting-twitter-stock-advice- tips/#ixzz1aV05MeNq

5. C. Workers not willing to move = workers, businesses must be free to move to areas where they will succeed

6. D. Externality = a side effect to an activity 1. Negative E = bad side effect 2. Positive E = good side effect 3. a market failure because those affected negatively are not being compensated

7. E. Too many Public Goods = goods & services that are provided through tax dollars

8. California’s Annual Costs to Incarcerate an Inmate in Prison 2008-09 Type of Expenditure Per Inmate Costs Security$19,663 Inmate Health Care$12,442 Medical care$8,768 Psychiatric services1,928 Pharmaceuticals998 Dental care748 Operations$7,214 Facility operations (maintenance, utilities, etc.)$4,503 Classification services1,773 Maintenance of inmate records660 Reception, testing, assignment261 Transportation18 Administration$3,493 Inmate Support$2,562 Food$1,475 Inmate activities439 Inmate employment and canteen407 Clothing171 Religious activities70 Rehabilitation Programs$1,612 Academic education$944 Vocational training354 Substance abuse programs313 Miscellaneous$116 Total$47,102

9. 9 million people in jail worldwide 2.2 million of them are in U.S. jails (25%) 170,000 are in CA jails

10. CH. 7.3 fill in Notes : Agencies and Laws

11. II. Federal Agencies created to regulate businesses: A. CPSC (1972) = develops safety standards of consumer goods B. FDA (1906) = enforces safety and truthfulness of food, drugs, and cosmetics C. FCC (1934) = regulates radio and t.v. programs D. SEC (1934) = regulates stock industry E. EEOC (1964) = investigates employer discrimination http://shopping.yahoo.com/news/10-beloved-banned-and-recalled-products-20121114-211459.html

12. F. EPA = protects environment G. NRC = regulates nuclear power industry

13. http://totallyabsurd.com/archive.htmhttp://totallyabsurd.com/archive.htm = funny patents http://www.prnewswire.com/mnr/adcouncil/34089/http://www.prnewswire.com/mnr/adcouncil/34089/ suction tires http://www.uspto.gov/http://www.uspto.gov/ = patent office http://www.dispatch.com/live/content/business/stories/2010/03/07/the-new-frontier.html?sid=101 >>>> article about average price of monthly cell service