Thursday, May 27, 2010

Unit 1: Market failure in the alcohol market

A great video from the BBC

http://news.bbc.co.uk/1/hi/business/10167936.stm
a) Why is demand for alcohol rising?
b) What negative externalities are there associated with excessive alcohol consumption?
c) Using a diagram, explain how the free market fails
d) How successful do you think imposing a minimum proce on alcohol would be in reducing the market failure?

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