ECO 1104 Lecture 13: Dec.6.2018

• School: University of Ottawa
• Department: Economics
• Course: ECO 1104
• Professor: David Gray

Document Summary

Any situation in which unregulated markets fail to bring about a socially desirable outcome (where the total surplus is maximized) Competitive markets usually yield desirable outcomes efficiency, whereby, the output level is such that mb (marginal benefits) = mc. Mb is indicated by the height of the demand curve, mc is the height of the supply curve. Left-wing people tend to think that markets usually fail while right wing people believe the opposite. Inequality (20) - will not do this term) Difference between public goods and private goods lies mostly on the d side as opposed to the s side. Best way to think of them is in contrast to private goods. One person"s consumption of a private good infringes upon somebody else"s consumption of the good. If somebody stole candy from you and ate it then you have no use for it. Possible to prevent someone from consuming it.