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 and(course objective 3)Discuss how markets function and what happens in the presence of market failures.

• Apply the concepts of social cost in a supply and demand model to a specific situation

Always use the economic terms, diagrams and concepts we are learning this week to earn full credit.

1."The problem is markets don't account for everything. That is why they aren't efficient. For example, farming vegetables while using pesticides effectsseashore nesting birds - their eggs become thin and the little birdies do not survive. Come on!

Analyze that comment using economic concepts and ideas. (Hint - think of markets, social costs, efficiency and the allocation of resources.)