Lecture Notes 1-28-10 - Notes: 1-28-10 Asch T. Hawthorn...

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Notes: 1-28-10 Economics T-Th A. Ordonez Asch T. Hawthorn 809-195-3K1C 1/28/10 Principle 7: Governments can sometimes improve market outcomes. Markets work only if property rights are enforced. Property Rights are the ability of an individual to own and exercise control over a scarce (limited) resource. Market failure occurs when the market fails to allocate resources efficiently When the market fails, the government can intervene to promote efficiency and equality. Market failure may be caused by: o An externality, which is the impact of one person or firms actions on the well- being of a bystander. o Market Power, which is the ability of one person or firm to unduly influence market prices. Principle 8: A countries standard of living depends on its ability to produce goods and services. Standard of living may be measured in different ways: o By comparing personal incomes. o
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This note was uploaded on 05/10/2010 for the course ECONOMICS 809-195-3K taught by Professor A.ordonez during the Spring '10 term at Gateway Tech.

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Lecture Notes 1-28-10 - Notes: 1-28-10 Asch T. Hawthorn...

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