In a market-based economy, most valuable resources are allocated through mutually beneficial exchange, either

with monetary payment or in the form of barter. However, not all valuable goods and services can be allocated

through market exchange. For example, your rights to college study.

1) What is the competitive criterion in the market place? What is its function in resource allocation? What are

the "rules of the game" associated with market transactions? What is the function of the "rules of the game"?

2) Can you provide an example in which market exchange is unable to allocate resource effectively? What is

the competitive criterion in that case? What are the relevant "rules of the game"?

3) Suppose it becomes possible to apply market mechanism to allocate the resource in your example, how do

you evaluate the efficiency level of applying market mechanism versus the criterion otherwise?