ECONOMICS: -need some notes on market failure n policies to alleviate poverty -

talal096

talal096

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can any 1 tell me which is the best book for o'level economics????????
 
talal096

talal096

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is it available in pakistan...nd do u hav any notes for economics??
 
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Muhammad Huzaifa Zafar

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Dude market failure means the disadvantages of free market economy in other words!
You just have to describe poor resource allocation which is the result of providence of demerit goods e.g cigarettes and very little or no providence of public and merit goods! also free market does not take negative externalities of production into consideration as their main aim is profit maximization. there is a chance of creation of monopoly which means the firm might be involved in over production and undercharging. resources will be wasted on advertising as there is greater competition between firms in a market economy. All of these would lead to a decrease in economic growth resulting in inefficient production and causing the market to fail.
 
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Muhammad Huzaifa Zafar

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while alleviating poverty in a country is indirectly linked to reducing level of unemployment in the country which is a macroeconomic objective of the government. you need to mention about demand-side policies such as fiscal policy and supply-side policies such as providing subsidies in detail in this question. Bringing down the inflation rate is another way of alleviating poverty. redistributing income is another way i.e. taxing the rich people heavily and using the revenue generated from those taxes to benefit the poor people. All of these are linked with demand and supply side policies mentioned earlier.
 
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