ECN 203 (10), The Microeconomy and The Government

ECN 203 (10), The Microeconomy and The Government - Chapter...

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Chapter 10: The Microeconomy and The Government This chapter examines what government can do to remedy problems of market power and market failure in an economy. The chapter also examines practical problems for government in trying to remedy problems. Should the government intervene in trying to solve problems, or let the problems solve themselves?
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Remedying Market Power: Leveling the Playing Field Passing and enforcing anti- discrimination legislation (civil rights, gender, age, etc.). Note they don’t change social perceptions (should they?). North American Free Trade Agreement (NAFTA) – free trade among US, Canada, and Mexico. Labor Unions – giving labor equal leverage to bargain with employers.
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Remedying Market Failure: Providing Public Goods Government provides Public Goods (e.g. military protection). Public Goods solve free rider problem by taxing everyone to pay for these goods.
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Attempting to Remedy Market Failure: Externalities Government passes and enforces
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This note was uploaded on 06/16/2011 for the course ECON 203/101 taught by Professor Na during the Fall '09 term at University of North Carolina School of the Arts.

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ECN 203 (10), The Microeconomy and The Government - Chapter...

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