please define give two unique example for each Please define the following and g

Question

please define give two unique example for each

Please define the following and give your unique example for each. No two examples should be the same in the class discussion. You may want to utilize the internet to find definitions and examples. Market failure (demand side) Market failure (supply side) Efficiently functioning market Consumer surplus Producer surplus Negative externality - overproduction Positive externality - underproduction Public good Private good Government intervention to correct externalities

Explanation / Answer

Market Failure (demand side) – When consumers fail to take into account the full costs of consumption to themselves, or society

Market Failure (supply side) – When producers fail to take into account the full costs of production to society and thus the supply curve is imperfect to show actual supply situation in the market.

Efficient Functioning Market- A market with no externalities or the demand and supply curve exactly depicts the demand and actual supplu in the market. There are no positive or negative externalities that affect the market.

Consumer Surplus-the difference between what the consumer is willing to pay and what he actually pays. Market price is 5 and as per the demand curve he should pay 7 for 3 units but he pays 5 that is total 15, though he is willing to pay (7*3) 21. The rest (21-15) 6 is consumer surplus

Producers Surplus- An economic measure of the difference between the amount that a producer of a good receives and the minimum amount that he or she would be willing to accept for the good

Negative Externality- Negative externalities are costs that are infeasible to charge to not provide. Pollution of water and air by the affluents of the corporations.

Positive Externality- These are the benefits which every individual of the society gets such as research and development,

Public Goods –Those goods, use of which cannot be restricted and use by one will not affect the supply to the other individual in the society. For example, Roads, Bridges and water

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