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Assignment 1: Markets Failures and Exceptions

For each of the following situations, the market system has failed and/or just will not allocate resources efficiently:

Situation 1: Firm A produces cement sifters. The process includes the melting of metals and chemicals which give the sifters strength. In the production process, waste is produced and released into the river that runs alongside of the plant.

Situation 2: Some states allow students to attend certain universities within the state tuition free if they are a resident of that state. As a result of this policy, the state’s population is more educated and more productive in the workplace than many other states.

Situation 3: You live in a small subdivision with several residents. The subdivision has one short dirt road that provides access to all the homes. Bob, one of the residents of the subdivision, just inherited a large sum of money and decides to have the road in the subdivision paved. After the paving, Bob asked the other residents to pay their fair share of the costs for the paving, but they all refused.

Situation 4: The President of the United States has determined that the cost associated with national defense has become too expensive. In an effort to reduce costs and balance the budget, the President has asked the public to voluntarily pay for their fair share of the costs associated with national defense. One of his advisors insists that this would not work, another advisor thinks it’s good policy. Which advisor is correct?

Deliverables:

Using the situations above, prepare a 5-10 page Microsoft Word document that addresses the above situations and meets APA standards.Include a summary section in your report that contains 5-7 bullet points identifying your major findings or conclusions of your paper. Submit this report as your initial post in theW3, Assignment 1 Discussion Area by Week 3, Day 3.Continue your discussions until the end of the week by commenting on at least two other submissions by your peers, identifying the strengths and weaknesses of each post.

All submissions must be original and all resources must be properly acknowledged.

 

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