How the market and market failure

Learning Outcomes

At the end of the unit students will be able to:

  • describe the allocation of resources in market and mixed economic systems;
  • demonstrate the principle of equilibrium price and analyse simple market situations with changes in demand and supply;
  • describe the causes of changes in demand and supply conditions and analyse such changes to show effects in the market;
  • define price elasticity of demand and supply and perform simple calculations;
  • demonstrate the usefulness of price elasticity in particular situations such as revenue changes, consumer expenditure;
  • describe the concept of market failure and explain the reasons for its occurrence;
  • evaluate the merits of the market system;
  • define private and social costs and benefits and discuss conflicts of interest in relation to these costs and benefits in the short term and long term through studies of the following issues:
    • conserving resources versus using resource
    • public expenditure versus private expenditure

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