T8 - Market Imperfections Flashcards
What is info failiure
When peopel have innacture, incomplete info and ptoentially make wrong chocies
Causes of info failirue
Misudnerstandign true beenfits/costs
Complex info
Inncacurate or misleadign info
Addiction
Lack of awareness
Info baises
Assyetric info
Gov intervention to deal with info failirue
labeling
industry standards
consuemr protection laws
adevrtisement
internt
Whta is assymetric info
When one person in a market knwos more than another
Whta is assymetric info
When one person in a market knwos more than another
Costs of monopoly power
Les chocie
High price Restrcited output
Less conusmer suprlus
Assymetric ifo
productiev ineeffficnecy
Allocative ineffciency
Net welfare loss
Reduced employemnt
Costs of monopoly power
Les chocie
High price Restrcited output
Less conusmer suprlus
Assymetric ifo
productiev ineeffficnecy
Allocative ineffciency
Net welfare loss
Reduced employemnt
Benefits of a monoplu
Exploit EOS
Dynamic efficnecy
Avodis waste
Regualtion on monopoly power abuse
Price control
Prohibitign mergers
Breaking up infrastructur
Nationalisation
Deregualtion
What is factor immovility
Where factors of production find it difficult to move to diff areas of economy ( geo and lack of skills (occupational))
Policies to imporve geo immobility
Inc housing
Inc renting housing
Move jobs out of london
Improved transport
Improtance of factor immobility
Causes strctural unemployment
Economic ineffcicinecy
Causes a market failirue (misalloaction of resources in factor market)
Increase inequality
Policies to overcoem factor imobility
Imporve provision of info
Subsidise
Education and training
causes of geo immobility
high cost of moving
lack of info on availble jobs or hosuing
family connection
cultural barriers
migration control
