Lecture 15-1.ppt

©2005 Pearson Education, Inc.
Ялпи мувозанат ва иқтисодий
самарадорлик
LECTURE 14. Topic for
Today:
Module: MAB083
Microeconomics
Discipline Lecturer
Sharipova Zebo
Semester
3

Chapter 16
General Equilibrium and
Economic Efficiency

©2005 Pearson Education, Inc. Chapter 16 3
Мавзу режаси
 Ялпи мувозанат таҳлили
 Савдодаги самарадорлик
 Бозордаги тенглилик ва самарадорлик

Yalpi muvozanat tahlili
 Shu paytgacha biz qisman muvozanatni
tahlil qilishga e'tibor qaratdik
Bitta bozordagi faoliyat turi boshqa bozorlarga
ta’siri sezilmaydi yoki umuman ta'sir qilmaydi
 Bozorning o'zaro aloqalari muhim bo'lishi
mumkin
To`ldiruvchilar va o`rin bosarlar
Firmalarning ishlab chiqarish resurslariga
bo`lgan talabining o'sishi resursning hamda
mahsulotning bozordagi narxining ko'tarilishiga
olib kelishi mumkin

 Bozorlarning o'zaro bog'liqligini o'rganish
uchun biz yalpi muvozanat tahlilidan
foydalanishimiz mumkin
Teskari ta'sirlarni hisobga olgan holda barcha
tegishli bozorlardagi narxlar va miqdorlarni
bir vaqtning o'zida aniqlash kerak
 Teskari ta'sir - bu tegishli bozorlardagi
narxlar va miqdorlarni o'zgartirishi
natijasida kelib chiqqan bog`liq bozordagi
narx yoki miqdordagi moslashuv

 Stsenariy
Raqobatbardosh bozorlaridagi:
 DVD ijarasi
 Kinoteatr chiptalari
Ushbu tovarlar o'rnini bosuvchi
mahsulotlardir
Bir bozordagi narxlarning o'zgarishi boshqa
bozorga ta'sir qilishi mumkin

 Stsenariy
Kino chiptasining bozor muvozanatidagi
narxi- $6.00
DVD ijarasining bozor muvozanat narxi -
$3.00
Hukumat har bir kino chiptasiga $1.00 dollar
soliq soladi
Soliqning ta'sirini ko'rib chiqish kerak
 DVD disklari bozori
 Kino bozoridagi teskari aloqa effektlari

©2005 Pearson Education, Inc. 8
DV
DM
Price-Narx
Soni
DVD videolar
Price- Narx
Soni
Kino chiptalari
SM
SV
$6.00
QM
QV
$3.00
$6.35
Q’M
S*M
Har bir kino chiptasiga $1
soliq taklifning pasayishiga
olib keladi
D’V
Q’V
$3.50
Yalpi muvozanat tahlili:
Kino chiptalari narxlarining o'sishi
videofilmlarga talabni oshiradi.

Price
Soni
DVD videolar
Price
Soni
Kino chiptalari
DM
SM
$6.00
QM
$6.35
Q’M
S*M
Videolar narxining oshishi
filmlarga bo'lgan talab.
D’V
DV
SV
QV
$3.00
Q’V
$3.50
Yalpi muvozanat tahlili:
Teskari aloqa ta'siri davom etmoqda.
D*M
$6.82
Q*M
Q”M
$6.75
D’M
$3.58
Q*V
D*V

 Kuzatuv natijasi
Yalpi muvozanatda Teskari ta'sirni hisobga
olmasdan, soliqning ta'siri etarlicha
baholanmagan bo'lar edi
Bu qonunchilar va siyosatchilar uchun muhim
masaladir
 To`ldiruvchilar bozorida soliq haddan ziyod
oshib ketishini o'zingiz tekshirishingiz
mumkin

 Bir vaqtning o'zida ikkala ish/chiqaruvchi
film va DVD ning muvozanat narxini
aniqlay olishi kerak
Biz bir vaqtning o'zida barcha tegishli
bozorlarda talab qilingan miqdor bilan taklif
miqdorini tenglashtiradigan ikkita narxni
topishimiz kerak
To’rtta tenglamaning echimini topish talab
etiladi: DVD va filmlarga talab va taklif

 Braziliya va Amerika Qo'shma Shtatlari
jahon soya bozorida raqobatlashadi,
shuning uchun bitta bozor boshqasiga
ta'sir qilishi mumkin
 Braziliya soya fasulyesi eksportini 1960-
yillarning oxiri va 1970-yillarning
boshlarida cheklab qo'ydi, natijada
Braziliyada narx pasayib ketdi
 Oxir oqibat eksport nazorati olib
tashlanishi kerak edi va Braziliya eksporti
ko'payishi kutilgandi

 Asosan qisman muvozanat tahlili kutilgan
edi
Dastur haqiqatan ham AQShda soya
fasulyesi narxi va ishlab chiqarilishini hamda
AQSh eksportini oshirdi
Dastur Braziliyani nazorat olib
tashlanganidan keyin ham eksport qilishda
qiyinchiliklarga olib keldi
Har bir bozorga qanday ta'sir qilganini
umumiy muvozanat tahlili va taqqoslash bilan
ko'rsatish mumkin

©2005 Pearson Education, Inc. 14
Soya eksporti - Braziliya va
AQSh

Savdodagi samaradorlik
 Biz raqobatbardosh bozorlar
samaradorligini ko'rsatdik, chunki
iste'molchilar va ishlab chiqaruvchilarning
foydasini maksimal darajaga ko'tara oladi
 Savdo iqtisodiyotini o'rganish orqali biz
buni batafsil o'rganishimiz mumkin
Ikki yoki undan ortiq iste'molchilar o'zaro ikki
turdagi tovarni sotadigan bozor
Ikkita mamlakatlar ham xuddi shunday
o`zaro savdo qilishlari mumkin

 Tovarlarni samarali taqsimlash - bu
tomonlarning birining boshqasiga nisbatan
ustunligiga qarab taqsimlash tushuniladi
(Bir tomonni yomonlashishi evaziga
ikkinchi tomonnni yaxshilanishiga olib
keladi)
 Pareto samaradorligi
 Ikki tomon o'rtasidagi ixtiyoriy savdo o'zaro
manfaatli bo'lib, iqtisodiy samaradorlikni
oshiradi

Savdo afzalliklar
 Misol
Ikki iste'molchi (mamlakatlar)
Ikki tovar
Ikkala tomon ham bir-birining afzalliklarini
bilishadi
Tovarlarni almashtirish nol operatsion
xarajatlarni o'z ichiga oladi
Jeyms va Karenda jami 10 ta oziq-ovqat va 6
ta kiyim bor

Savdo afzalliklar
Yakka Dastlab
ajratish
Savdo Yakuniy
taqsimot
James 7F, 1C -1F, +1C 6F, 2C
Karen 3F, 5C +1F, -1C 4F, 4C
 Ularning farovonligini aniqlash uchun biz
oziq-ovqat va kiyim-kechak uchun
afzalliklarini bilishimiz kerak

©2005 Pearson Education, Inc. Chapter 16 Slide 19
Savdo samaradorliklari
 Qirrali qiymatli to`rtburchakli Diagramma
 Qaysi savdolar imkonli bo'lishi va qaysi
taqsimot samarali bo'lishini Edgeworth Box
deb nomlangan diagramma yordamida
ko'rsatishi mumkin.

Savdo qirrali qiymatli to`rtburchakli
Edgeworth Box diagrammasi
10F 0K
0J
6C
10F
6C
Jamesning
kiyim
kechaklari
Karenning
kiyim
kechaklari
Karenning oziq ovqati
Jamesning oziq ovqatlari
2C
1C 5C
4C
4F 3F
7F
6F
+1C
-1F
Savdo so'nggi
Taqsimot
B: Jeyms
6F va 2C & Karenga ega
4F va 4C ga ega.
A
B
Savdo oldingi
Dastlabki taqsimot
A: Jeyms
7F va 1C ega & Karen
3F va 5C ga ega.

Savdo afzalliklar
 Aytaylik, Karen Jeymsga 1 ta oziq-ovqat
uchun 1 ta kiyim taklif qildi
Jeyms kiyim-kechakka ega bo'ladi, uni
ovqatdan ko'ra ko'proq qadrlaydi
Karen ko'proq qadrlaydigan ovqatga ega
bo'ladi
 Har doim ikkita iste'molchining MRSlari
har xil bo'lganda, o'zaro manfaatli savdo
uchun imkoniyat mavjud
Resurslar taqsimoti samarasiz

Savdo afzalliklar
 Ushbu tahlildan biz muhim natijaga
erishamiz:
Tovarlarni taqsimlash, agar tovar har qanday
juft tovar o'rtasidagi almashinuvning chegara
darajasi barcha iste'molchilar uchun bir xil
bo'lishi uchun taqsimlangan taqdirdagina
samarali bo'ladi.

 Shartnoma egri chizig'i
Karen va Jeyms o'rtasida oziq-ovqat va kiyim-
kechakning mumkin bo'lgan barcha samarali
taqsimotlarini topish uchun biz ularning har bir
befarqligi egri chiziqlari orasidagi barcha
teginish nuqtalarini qidiramiz.
Shartnoma egri chizig'i tovarlarni ikkita
iste'molchi o'rtasida yoki ikkita ishlab chiqarish
funktsiyalari orasidagi ikkita ma'lumotni
taqsimlash samaradorligini ko'rsatadi

Shartnoma egri chizig`i
 Befarqlik egri chiziqlari orasidagi barcha
teginish nuqtalari samarali
Jismoniy shaxslarning MRSsi bir xil
Savdo uchun boshqa imkonyo'q
 Shartnoma egri chizig'i Pareto
samaradorligini ko'rsatadigan barcha
ajratmalarni ko'rsatadi
Pareto samarali taqsimoti keyingi savdo bir
tomonning vaziyati yomonlashishiga olib
kelganda sodir bo'ladi

UK
1
UK
2
P
Price Line
P’
PP '- bu narx liniyasi
va mumkin bo'lgan
ko'rsatmalar
kombinatsiyalar; qiyalik -1 ga
teng
UJ
1
UJ
2
Raqobatdosh muvozanat
10F 0K
0J
6C
10F
6C
Jamesning
kiyimi
Karenning
kiyimi
Karenning ovqati
Jamesning ovqati
C
A
A dan boshlang:
Har bir Jeyms 2C sotib oladi
va 2F sotadi
Jeyms Uj1 dan Uj2 ga o'tishi kerak edi, bu
afzallik beriladi (A dan C gacha).
A dan boshlang:
Har bir Karen 2F sotib
oladi va 2C sotadi. Karen
UK1 dan UK2 gacha
ko'chib o'tardi, afzallik
beriladi (A dan C gacha).

 Vaziyat: Import kvotalarini olib
tashlanganda Pareto samaradorligi
siyosati:
1. Kvotalarni olib tashlash
 AQSh iste'molchilari foydasiga
 Ba'zi AQSh ishchilari yutqazishadi
2. Ishchilarga kvotalar va subsidiyalarni olib
tashlash

Raqobatbardosh bozorlarining
iqtisodiy samaradorligi
 Oldin ko'rsatilgandek, raqobatbardosh
muvozanatda taqsimlash iqtisodiy
jihatdan samarali ekanligini ko'rishimiz
mumkin
Samaradorlik nuqtasi ikkita befarqlik egri
chizig'i tegadigan joyda paydo bo'lishi kerak
Agar yo'q bo'lsa, iste'molchilardan biri
o'zlarining yordam dasturini oshirishi va
moddiy ahvolini yaxshilashi mumkin

Raqobatbardosh bozorda
iste'molchilar muvozanati
 Barcha bozorlar mukammal raqobatdosh
bo'lgan umumiy muvozanat sharoitida biz
bir xil natijani ko'rsatamiz
Adam Smitning ko'rinmas qo'lining eng
yaxshi namunasi
Iqtisodiyot avtomatik ravishda barcha
resurslarni tartibga soluvchi nazoratga ehtiyoj
sezmasdan samarali ravishda taqsimlaydi
 Dalillar kamroq davlat aralashuvi va yuqori
raqobatbardosh bozorlarni qo'llab-quvvatlaydi

Raqobatbardosh bozorda
 Iqtisodiy farovonlikning birinchi teoremasi
Agar barcha raqobatdosh bozorda savdo qilsa,
barcha o'zaro manfaatli savdolar ta`minlanadi
va natijada muvozanatli taqsimlash resurslari
iqtisodiy jihatdan samarali bo'ladi
Iqtisodiyot farovon bozorlar va iqtisodiy
siyosatni me'yoriy baholashni o'z ichiga oladi

Raqobatbardosh bozorlarda
 Raqobat muvozanati
1. Befarqlik egri chiziqlari teginishli bo'lgani uchun
barcha MRS iste'molchilar o'rtasida tengdir
2. Har bir befarqlik egri chizig'i narx chizig'iga
tegishliligi sababli, har bir odamning MRS
qiymati ikki tovarning narx nisbati bilan tengdir
K
FC
F
C
J
FC MRS
P
P
MRS 


Raqobatbardosh bozorlarda
 Ko'pgina iste'molchilar va ishlab
chiqaruvchilar bilan samarali taqsimlash
qiyin, agar barcha bozorlar to'liq
raqobatdosh bo'lmasa
 Markazlashgan tizim yordamida ham
samarali natijalarga erishish mumkin
 Iste'molchilar va ishlab chiqaruvchilar
o'zlarining afzalliklari va ta'minotlarini
yaxshiroq baholashlari mumkin bo'lganligi
sababli raqobatdosh natijalar afzal ko'riladi

Tenglik va samaradorlik
 Garchi ko'plab samarali ajratmalar mavjud
bo'lsa-da, ba'zilari boshqalarga qaraganda
adolatli bo'lishi mumkin
 Qiyin savol tug'iladi, eng adolatli ajratish
nima?
 Raqobatbardosh bozorlardan samarali
ajratish adolatli taqsimot beradi deb
ishonish uchun hech qanday asos
yo'qligini ko'rsatishimiz mumkin

Ijtimoiy ta'minot funktsiyalari
 ko'pincha shaxsning foydaliligini aniqlash
uchun ijtimoiy jihatdan nimaga mos
ekanligini ko`rishda Vaznlar qo'llaniladi
Ushbu og'irliklarning qanday qo'llanilishi
ijtimoiy ta'minot funktsiyalaridan kelib chiqadi
 Foydalilik funktsiyasi butun jamiyat
uchun foydaliligini maksimal darajaga
ko'tarish uchun har kimning foydaliligini
vaznga tortadi

 Har bir ijtimoiy ta'minot funktsiyasi
kapitalning ma'lum bir ko'rinishi bilan
bog'liq
 Ba'zi tenglik qarashlari vaznlarni belgilay
olmaydi va ularni farovonlik funktsiyasi
bilan ifodalash mumkin emas
Raqobatbardosh bozor jarayoni adolatli,
chunki u eng harakatga qodir va ko'p mehnat
qilganlarni mukofotlaydi
Raqobatbardosh muvozanati eng adolatli
bo'lishiga ishonish

 Roulscha fikrlash shundaki, shaxslar
o'zlarining ehsonlari qanday bo'lishini
bilishmaydi
 Roulzning ta'kidlashicha, agar siz
o'zingizning taqdiringizni bilmasangiz, eng
kam ta'minlangan odamga oqilona
munosabatda bo'ladigan tizimni tanlaysiz
 Eng adolatli taqsimot jamiyatdagi eng kam
ta'minlangan kishining foydasini maksimal
darajada oshirishga intilishdir

 Tenglik nuqtai nazariga ko'ra, tovarlarni
jamiyatdagi barcha shaxslar teng
ravishda bo'lishishi kerak
 Har xil vaziyat bo'lishi mumkinki,
samaraliroq odamlar mukofotlanib,
ko'proq mahsulot ishlab chiqaradilar va
keyin butun jamiyat uchun qayta
taqsimlanishlari kerak.

Tenglikning to’rtta nazariyasi
Egalitar
Jamiyatning barcha a'zolari teng
miqdordagi tovarlarni oladilar
Roulslar
Eng kam ta'minlangan kishining
yordam dasturini maksimal darajada
oshiring
Utilitar
(foyda
olishga
intiluvchila)
Jamiyatning barcha a'zolarining
umumiy foydaliligini maksimal
darajada oshirish
Bozorga
asoslangan
lar
Bozor natijalari eng adolatli
hisoblanadi

Tenglik va mukammal raqobat
 Raqobatbardosh muvozanati dastlabki
taqsimotga qarab shartnoma egri
chizig'ining istalgan nuqtasida paydo
bo'lishi mumkin
 Hamma raqobatbardosh muvozanatlar
teng emasligi sababli, biz hukumat
daromadlarni qayta taqsimlashi orqali
tenglikka erishishishini kutamiz
Soliqlar
Davlat xizmatlari

 Odilroq bo'lishni xohlaydigan jamiyat samarasiz
dunyoda ishlashi shartmi?
Iqtisodiy Farovonlikning ikkinchi teoremasi
Agar individual imtiyozlar qavaqriq bo'lsa, unda
har qanday samarali taqsimot (shartnoma egri
chizig'idagi har bir nuqta) tovarlarni dastlabki
taqsimlash uchun raqobatdosh muvozanatdir

 Teng bo'lgan har qanday muvozanatni
resurslarni qayta taqsimlash orqali
erishish mumkin va samarali bo'lishi
mumkin
 Tovarlarni qayta taqsimlashning odatiy
usullari, ammo qimmatga tushadi
Soliqlar yomon rag'batlantirishga olib keladi
 Soliqlardan qochish uchun firmalar ishlab
chiqarishga kamroq resurslarni sarflaydilar
 Shaxslarni kamroq ishlashga undash

Ishlab chiqarish samaradorligi
 Ikki tovarni almashtirish masalasini muhokama
qilishdan biz ishlab chiqarish uchun
foydalaniladigan ma'lumotlardan samarali
foydalanishni kengaytirishimiz mumkin
 Faraz qiling:
Ikkita o`zgarmas resurs: kapital va ishchi kuchi
Xuddi shu ikkita tovarni ishlab chiqaring: oziq-
ovqat va kiyim-kechak
Ko'pgina iste'molchilar ishlab chiqarish uchun
ma'lumotlarga egalik qilishadi va ularni sotishdan
daromad olishadi
Tovarlar o'rtasida taqsimlangan daromad

Efficiency in Production
 Using the Edgeworth Box diagram, we
can show efficient use of inputs in
production
Labor on horizontal axis
Capital on vertical axis
50 hours of labor and 30 hours of capital
available
Each origin is an output

Production in an Edgeworth Box
 Each point in the box represents the
labor and capital inputs in the production
of food and clothing
 Can use production isoquants to show
levels of output produced with each
combination of inputs
3 isoquants representing 50, 60 and 80 units
of food
3 isoquants representing 10, 25 and 30 units
of clothing

Production in an Edgeworth Box
 Production at point A is inefficient since
we can increase production of both
goods
Shaded area indicates increases in
production of both goods if begin at A
Allocation A could exist if a labor union
market has enforced inefficient work rules

Producer Equilibrium –
Competitive Input Markets
 If input markets are competitive, an
efficient point will be achieved
 In competitive input markets
Wage rate, w, will be equal in all industries
Rental rate of capital, r, will be equal in all
industries

 We saw before that if producers minimize
costs, they will choose inputs to the point
where the ratio of the marginal products
of the two inputs is equal to the ratio of
input prices:
r
w
MP
MP
K
L


 Ratio of marginal products is the same as
the marginal rate of technical substitution
of labor for capital:
LK
K
L
MRTS
r
w
MP
MP



 The MRTS is the slope of the isoquant,
so competitive equilibrium exists only if:
Slopes of the isoquants are equal to one
another
These also equal the ratio of the prices of
two inputs
 Competitive equilibrium lies on the
production contract curve, and the
competitive equilibrium is efficient in
production

Production Possibilities Frontier
 PPF shows the various combinations of
two goods that can be produced with
fixed quantities of inputs
 Frontier is derived from the production
contract curve
 Points on PPF show efficiently produced
levels of both goods

Clothing
(units)
Food
(units)
• Point A is inefficient
• Points B, C and D are efficient
• All points in triangle ABC
completely utilize capital and
labor, but distortion in labor
market leads to inefficient use
OF
OC
D
C
B
A

 PPF is downward sloping
In order to produce more of one good, must
give up producing some of the other good
 PPF is concave
Slope is the MRTS which increases as the
level of production of food increases

 Marginal rate of transformation (MRT) of
food for clothing is the magnitude of the
slope of the frontier at each point
Amount of one good that must be given up to
produce one additional unit of a second good
How much clothing must be given up to
produce one additional unit of food
As we increase the production of food by
moving along the PPF, the MRT increases

Marginal Rate of Transformation
 The productivity of labor and capital
differs depending on whether the inputs
are used to produce more food or
clothing
Starting where only clothing is produced, MP
of labor and capital are relatively low
Transferring some to food production where
MP is relatively high
As we do this, MP in food decreases and MP
in clothing increases

Clothing
(units)
Food
(units)
OF
OC
D  MRT = 2
B  MRT = 1
MRT < 1
MRT > 1

Marginal Rate of Transformation
 Can also describe in terms of costs
When producing at OF, the MC of food is very low
and the MC of clothing is very high
When MRT is low, so is the ratio of the MC of
producing food to clothing
Slope of PPF measures the MC of producing one
good relative to the MC of producing the other
C
F
MC
MC
MRT 

Output Efficiency
 For efficiency,
Good produced at minimum cost
Must be produced in combinations that
match people’s willingness to pay
MRS = consumer’s WTP for additional food
by consuming less clothing
MRT = cost of additional unit of food in terms
of producing less clothing
 Efficiency means MRS = MRT

Output Efficiency
 What if MRT  MRS?
Suppose MRT = 1 and MRS = 2
Consumer willing to give up 2 units of
clothing to get 1 unit of food
Cost of getting additional food is only 1 unit
of lost clothing
Too little food is being produced
Food production must increase, MRS falls
and MRT increases until two are equal again

Output Efficiency
Clothing
(units)
Food
(units)
60
100
Indifference Curve
MRS = MRT
PPF

Efficiency in Output Markets
 For perfectly competitive markets, all
consumers allocate their budgets so their MRS
between two goods are equal to the ratio of
prices
 Profit maximizing firms produce output to the
point where price is equal to MC
 MRT is equal to the MRS
MRS
P
P
MC
MC
MRT
C
F
C
F 



Efficiency in Output Markets
 Efficiency in competitive markets is
achieved when there is separate
production and consumption
 Market price ratio of P1
F/P1
C
 Food and clothing are produced at A
where price ratio equals MRT
 This price causes consumer to maximize
utility and consume at B

The Gains from Free Trade
 We have showed gains from trade in an
Edgeworth Box, but what about gains
from trade in two countries where one
has the comparative advantage?
A country has a comparative advantage over
another country in the production of a good if
the first country can produce the good at a
lower opportunity cost than the other country

 Ex: Two countries producing two goods
Holland and Italy
Cheese and Wine
Holland has comparative advantage in
cheese production
Italy has comparative advantage in wine
production
Trade is good for both countries

Hours of Labor Required to
Produce Cheese and Wine
Cheese
(1 LB)
Wine
(1 GAL)
Holland 1 2
Italy 6 3

 When there is comparative advantage,
free trade allows the country to consume
outside its PPF
 Before trade
Produces at A on indifference curve U1
where MRT and pre-trade price ratio is 2
Holland would want to export 2 pounds of
cheese for 1 gallon of wine

 After trade
Suppose they choose to trade 1 gallon of
wine for 1 pound of cheese
Holland will produce at the point of tangency
on the 1/1 price line and PPF – point B
Consumption will occur at D, on a higher
indifference curve U2 tangent to the trade
price line

The Gains from Trade
Cheese
(lbs)
Wine
(gal)
U1
Pre-Trade Prices
U2
World Prices
CB
B
WB
A
WD
D
CD
•Trade allows
Holland to consume
outside PPF
Exports
Imports

Overview – Efficiency of
Competitive Markets
1. Efficiency in Exchange
 MRSJ
FC = MRSK
FC
 MRSJ
FC = PF/PC = MRSK
FC
2. Efficiency in the use of inputs in
production
 MRTSF
LK = MRTSC
LK
 MRTSF
LK = w/r = MRTSC
LK

Overview – Efficiency of
Competitive Markets
3. Efficiency in the output market
 MRTFC = MRSFC (for all consumers)
 PF = MCF, PC = MCC resulting in
 MRTFC = MCF/MCC = PF/PC; therefore
 MRSFC = MRTFC

Why Markets Fail
 Market Power
Those with market power choose the price
and quantity
Less output is sold than in competitive
markets
Inefficiency
Can have market power as producers or as
inputs

Why Markets Fail
 Incomplete Information
Consumers must have accurate information
about market prices or production quality for
markets to operate efficiently
Lack of information can change supply
 Buy products with no value
 Don’t buy enough of products with value
Some markets may never develop

Why Markets Fail
 Externalities
Market prices do not always reflect the
activities of either producers or consumers
Consumption or production has indirect
effect on other consumption or production not
reflected in market prices
May be impossible to get insurance because
suppliers of insurance lack information

Why Markets Fail
 Public Goods
Nonexclusive, nonrival goods that can be
made available cheaply but which, once
available, are difficult to prevent others from
consuming
Company thinking about researching a new
technology if can’t get patent
 Once it’s made pubic, others can duplicate it

Lecture 15-1.ppt

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Lecture 15-1.ppt

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