• 1)Identify and describe the role of supply and demand and equilibrium in a market economy in terms of efficiency advantages as applied to the problem of scarcity andDiscuss how markets function and what happens in the presence of market failures. Draw a social cost supply and demand market diagram
• Explain why markets fail when there are unaccounted for social costs
• Summarize a few ways market failure due to social costs might be corrected

1A.Using lecture section 12.1"C. Market Failure".

Please describe the two ways markets can fail.

2A.Using lecture section 12.1"C. Market Failure".

Please draw a social cost supply and demand market diagram with arrows indicating a social cost.

3A.Using lecture section 12.1"C. Market Failure".Now read the entire section and

explain why markets fail to allocate resources when they do not take into account social costs (i.e. market failures.)

4A.Using lecture section 12.3"A. Pollution Charges".

Explain how a tax might effect the market supply line and correct for a market failure.

5B.Using your textbook section 12.2"Command and Control Regulation".

Explain command and control regulation.