Wk 3

Wk 3 – Critical Analysis Questions Chapters 5 & 6

Answer and submit using APA format the following Critical Analysis Questions:

Chapter 5: Questions 3, 12, 13

3. ; What are the distinguishing characteristics of “public goods”? ; Give two examples of a public good. ; Why are public goods difficult for markets to allocate efficiently?

12. ; What are the necessary conditions for economic efficiency? ; In what four situations might a market fail to achieve ideal economic efficiency?

13. ; What is market failure? ; If market failure is present, does this imply that government intervention will lead to a more efficient allocation of resources? Why or why not?

Chapter 6: Questions 3, 13

3. ; “If there are problems with markets, government will generally be able to intervene and correct the situation.” ; Is this statement true? ; Explain your response.

13. ; “Because government-operated firms do not have to make a profit, thy can usually produce at a lower cost and charge a lower price than privately owned enterprises.” ; Evaluate this view.