My purpose for speaking to you this evening is to inform on the state of our national economy which, as you know, is being seriously affected by a severe global financial crisis and a marked deterioration in the economic situation worldwide. You are, no doubt, aware of the damage that continues to be inflicted on the global economy by the deepening international financial market crisis that stemmed initially from the collapse of the sub-prime mortgage market in the United States of America. As an indication of the level of uncertainty that exists and just how quickly the economic situation is changing, the IMF published, just last week, an emergency update of its Fall World Economic Outlook. The Managing Director of the IMF, in an address to the Board of Governors last month, characterized the current financial situation as the "most dangerous financial crisis since the Great Depression of the 1930s". Tourism, the principal engine of the Bahamian economy, experienced an increase in income up to August of this year due to increases in room rates in New Providence; but hotel occupancy levels then fell precipitously in September and October and continue to do so. According to a Press Release from the World Tourism Organization today, "the latest edition of the world tourism Barometer confirms the rapid slowdown of international tourism growth since mid 2008...and the current troubled economic scenario is expected to continue into 2009..." Given the extreme uncertainty as to when a resolution of the financial crisis and the rebound in global economic activity will occur, it is very difficult at this time to assess how revenues will progress over the balance of this fiscal year and into the next". I.Identify the type of market failure being discussed and discuss why market failure occurs in this scenario. II. Suggest a relevant government policy that would yield the efficient outcome and carefully explain the process through which the implementation of the government policy will lead to the optimal outcome. III. How will the imposition of the chosen government policy impact consumer surplus, producer surplus and total surplus in this scenario