What is public economics?Study of the role of government in the economy |
When should the government intervene in the economy?Market failure Redistribution Info: Market failure: market economy delievers an outcome which is inefficient. Redistribution: market economy delivers an efficient but highly unequal outcome |
Main market failures? (four)Externalities Imperfect competition Imperfect and assymetric information Individual failures |
Imperfect competitionmonopoly |