List 5 conditions that are required to make the statement that private markets are the best way to allocate scarce resources, where best implies they maximize total surplus to society. For each give an example of a product that fails that condition and thus there is a market failure. 16. 17. 18. 19. 20. Draw the market for apartments in California. Make the supply relatively inelastic. Draw the demand roughly at a 45-degree angle. Indicate the equilibrium price and quantity. Then add to your graph what it would look like if a price ceiling was set below the equilibrium price. Indicate how consumer, producer and total surplus changes. Under what social welfare functions may social welfare improve with this policy. 21. 22. 23. 24. 25