Ch. 7.2 Notes : Market Failure

I. 5 variables that cause a market system to fail…..

A. No Competition = Need companies to fight for your business 1. Allows prices to be reasonable 2. Collusion might occur = companies strategizing together to set price

 

B. Dishonesty with Information = cannot take advantage of investors/buyers

Last weekend, 50, born Curtis Jackson, reportedly Tweeted to his 3.8 million followers, “You can double your money right now. Just get what you can afford” and “They are no joke get in now” .H&H closed at 39 cents on Monday, up 29 cents, netting Jackson’s shares the aforementioned $8.7 million.

Later, Jackson apparently back-peddled a bit when he reportedly

deleted his original posts and Tweeted, “I

own HNHI stock thoughts on it are my

opinion. Talk to financial advisor about it.” And

“HNHI is the right investment for me it may or may not be right for u!

Do ur homework.”

Read more: http://entertainment.blogs.foxnews.com/2011/01/12/50-cent-sec-tweeting-twitter-stock-advice-tips/

#ixzz1aV05MeNq

C. Workers not willing to move = workers, businesses must be free to move to

areas where they will succeed

D. Externality = a side effect to an activity 1. Negative E = bad side effect 2. Positive E = good side effect 3. a market failure because those affected negatively are not being compensated

E. Too many Public Goods = goods & services that are provided through tax dollars

California’s Annual Costs to Incarcerate an Inmate in Prison2008-09

Type of ExpenditurePer Inmate

CostsSecurity $19,663     Inmate Health Care $12,442Medical care $8,768Psychiatric services 1,928Pharmaceuticals 998Dental care 748     Operations $7,214Facility operations (maintenance, utilities, etc.) $4,503Classification services 1,773Maintenance of inmate records 660Reception, testing, assignment 261Transportation 18     Administration $3,493     Inmate Support $2,562Food $1,475Inmate activities 439Inmate employment and canteen 407Clothing 171Religious activities 70     Rehabilitation Programs $1,612Academic education $944Vocational training 354Substance abuse programs 313     Miscellaneous $116     Total $47,102

9 million people in jail worldwide2.2 million of them are in U.S. jails (25%)170,000 are in CA jails

CH. 7.3 fill in Notes : Agencies and Laws

• II. Federal Agencies created to regulate • businesses:• A. CPSC (1972) = develops safety standards • of consumer goods• B. FDA (1906) = enforces safety and • truthfulness of food, drugs, and • cosmetics• C. FCC (1934) = regulates radio and t.v. • programs• D. SEC (1934) = regulates stock industry• E. EEOC (1964) = investigates employer • discrimination

http://shopping.yahoo.com/news/10-beloved-banned-and-recalled-products-20121114-211459.html

F. EPA = protects environment G. NRC = regulates nuclear power industry

http://totallyabsurd.com/archive.htm = funny patents

http://www.prnewswire.com/mnr/adcouncil/34089/ suction tires

http://www.uspto.gov/ = patent office

http://www.dispatch.com/live/content/business/stories/2010/03/07/the-new-frontier.html?sid=101>>>> article about average price of monthly cell service