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Canada (493,092)
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ECON 101 (111)

continuing the last lecture..notes taken on jan 9th 2012

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University of British Columbia
ECON 101
Ratna Shrestha

7 Government can sometimes improve market outcomesmarket failure results in inefficiency failure of the invisible hand efficiency when the market fails the government can intervene to promote Ex government policies higher taxes on rich people government trying to equalize society property taxeslow income families get support from government Government also intervenes to promote EquityOftentimes both efficiency and equity are not obtainable simultaneously Canadian society is more equal compare to USHowever US is got more efficiency less equivalenceExternality Negative action harming other Ex factory harming environment population not compensating Positiveaction benefiting other Ex building a good house affecting the price of land nearbyMarket power is the ability of a single person or a small group to unduly influence market prices Ex monopoly Cartel no other choice ExBC hydro harming consumers more than its profit then its market failureWhat can government to dolimit the price Asymmetric information a situation where one
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