ECONOMICS LEVEL 3
Unit 1: An Introduction to Economics
Market failure and government policies
Economic knowledge
- Concept of market failure
Main types of market failure:
- income inequality: relative and absolute positive and negative externalities.
Economic decision-making
- Analysis of market failure in terms of public goods and common resources.
Economic policies and action
- The link between market failure and the role of government
- Government policy options to correct market failure – the use of taxes and subsidies, assigning property rights, regulating the use of common property, providing public goods and services.