Micro Unit 6

#topic/econ

A Market Failure is when a situation in which the free-market system fails to satisfy society's wants.
For example of marker failure:
Positive Externality
AND
Negative Externalities

These two are determined by:
Demand and Marginal Social Benefit (MSB) and Supply and Marginal Social Cost (MSC)

Government provide Public Goods, Public Goods are Non-Exclusionary and Non-Rival.
Free-market failed to provide Public Goods because there is low opportunity to earn profit. Government earn the money for public service through Taxes.

Income distribution in a country is not fair. It can be shown in Lorenz Curve.