Sunday, January 27, 2008

Unit 2: Information failure; food labelling

The BBC reports a new government strategy to tackle obesity in England which will target food labelling.
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Another article suggests most customers have no idea of the calories involved when they drink a cup of coffee

a) What is the problem for the consumer in the free market shown by these 2 articles?
b) What negative externalities are associated with this market failure?
c) What do you believe that the Government could do to alleviate this failure in the food market?
d) To what extent do you believe the Government can correct the market failure ?

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