Market Failure

Question 1

What are some UK examples of negative externalities
(mention measures to reduce the negative externality)

Answer 1

-Air pollution in congested areas like London (ULEZ tries to reduce this)
-Plastic waste leading to environmental harm (5p plastic bag charge)
-Noise pollution (Heathrow airport)

Question 2

What are some UK examples of the provision of public goods

Answer 2

-Government funding for travel (TFL)
-Governement funding for healthcare (NHS)
-Government funding of national defence
-Government funding of Street lighting

Question 3

What are some UK examples of positive externalities
(mention measures to further encourage externality)

Answer 3

-Education (University student loans, school funding)
-Public Health campaigns (NHS)
-Investment in green spaces (Hyde park)

Question 4

What are some UK examples of information gaps
(seller mas more than buyer)

Answer 4

-Second hand market (condition of the product)
-loans/mortgages (hidden fees)
-labour market (true productivity of individual)

Question 5

What are some UK examples of information gaps
(buyer has more than the seller)

Answer 5

-loans/mortgages (ability to repay)
-Insurance (they know their ability to pay it back)
-Car Insurance (only the buyer knows their full friving ability
-online marketplaces (knowledge of alternatives)