Pennsylvania Homeschoolers

AP* Online Classes

As a parent who has reviewed over 5 AP courses, I can highly recommend Mrs. Smith’s AP World History! It was the perfect balance of learning history with creative assignments while doing the work to prepare for the exam. Mrs. Smith was quick to reply to emails and willing to work around travel plans.

Application report

AP Micro-Economics, Daniel Burns

5/09/2015

 

Application report: Dealing with market failure

Find a real-world example of one of the three types of market failure (imperfect competition, public goods, and externalities) and analyze it using the concepts and terminology we have studied. The paper should include:

  1. A description of how the market outcome differs from the efficient outcome and its effects on producer surplus, consumer surplus, and deadweight loss.
  2. A properly labeled graph illustrating what you described in part 1.
  3. A government policy option to correct the inefficiency.
  4. A statement on whether the option you mention in part 3 is a good idea.

Part 4 is where free market advocates say whether you think the government should get involved in this particular area. Theoretically it may be possible for government to correct the inefficiency, but is that really a good idea? Will it create inefficiencies in other areas (wasted tax dollars for example), and what are the effects of big government on personal freedom?

Your final report might be about 500-600 words, although part 4 could go on longer if you want it to. As always, I’m looking for a sound line of reasoning more than any one particular answer. 

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