Saturday, October 20, 2007

Unit 2: Information failure; salt in fast food

This BBC clip and associated article looks at a new report which shows frighteningly high levels of salt in fast food, especially Pizza Hut pizza. The report shows some fast food may contain more than a whole day's recommended salt intake.
< http://www.bbc.co.uk/mediaselector/check/player/nol/newsid_7050000/newsid_7052100?redirect=7052102.stm&news=1&nbwm=1&bbwm=1&bbram=1&nbram=1&asb=1 >

http://news.bbc.co.uk/1/hi/health/7050585.stm

a) Explain what example of market failure this represents
b) What are the private benefits of pizza consumption?
c) What are the private costs of pizza consumption?
d) Using a diagram, explain how the market fails
e) Explain 2 different methods the government could use and explain how they would reduce the market failure
f) Comment on how likely these interventions by the government are to overcome the market failure

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