Unformatted text preview: economically justified. The first type of failure results from spillover costs and spillover benefits (externalities). Spillover costs (negative externalities) can be remedied by government through legislation or specific taxes. Spillover benefits (positive externalities) can be remedied by government through specific subsidies to consumers or producers, or through the production of quasi-public goods . The second type of failure strictly involves government production of public goods. (McConnel and Brue, Economics: Principles, Problems and Policies, 14th edition, Irwin McGraw-Hill, Inc., 1999, ISBN 0-07-047094-4)...
View Full Document
- Fall '10
- Capitalism, Market failure, Economic system, Externality, spillover benefits, spillover costs