Today we will continue our study of market failure by analyzing markets in which government policies such as taxes, subsidies, and price controls are used. You should read the text chapter identified below in the homework section, watch the related videos for help in understanding this material, do the activities identified, in the homework section and be prepared for the Problem of the Day. This page contains all the information you need for today's class. Use the table of contents on the right to help you navigate.
Reread Mankiw (Chapter 6), if it helps you. This is the relevant chapter in Mankiw for this unit.
Watch these videos.
Problem of the Day: Frequently at soccer practice noisy helicopters fly overhead, making it difficult for coaches to communicate with their players. Use a diagram to explain how this constitutes market failure in the helicopter industry.
Lecture: Taxes, subsidies, and price controls
Related Readings