Types of Market failure: Misleading prices lead to a difference between true prices and profits to society of economic activity. The market puts out the wrong signal, leading to a misallocation of resources
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Card 7
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Types of Market Failure: ... of public goods: Failure to produce public-goods such as Defence, Street Lighting, Lighthouses and policing. The reason for this is the free-rider problem
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Card 8
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Types of Market Failure: Assumptions of perfect markets include perfect knowledge, but consumers don't always have the full knowledge of what they are buying. Asymmetric information is another problem where either the buyer or seller has more info
