pp. 79-83 Government's
Role in a Market Economy:
Reallocating Resources if the Market Fails to Achieve Efficiency
Define Spillover
costs:
Examples of Spillover
costs:
Use the graph below to
answer the questions that follow.
What is the allocatively
efficient quantity?
What is the profit
maximizing quantity?
Which quantity will
be produced without government involvement?
Is there an OVER
allocation or an UNDERallocation of
resources?
What is the goal of
government involvement?
What are the possible
government policies to achieve this goal?
Define Spillover
benefits:
Examples of Spillover
benefits:
Use the graph below to
answer the questions that follow.
What is the allocatively
efficient quantity?
What is the profit
maximizing quantity?
Which quantity will
be produced without government involvement?
Is there an OVER
allocation or an UNDERallocation of
resources?
What is the goal of
government involvement?
What are the possible
government policies to achieve this goal?
