Wednesday, August 18, 2010

Unit 1: Information failure in 3 markets

3 stories from the BBC that may indicate information failure for consumers

http://www.bbc.co.uk/news/health-10986625 chocolate
http://www.bbc.co.uk/news/health-10986617 beer for women
http://www.bbc.co.uk/news/health-10987937 sunbed use

a) What is the market failure that results from information failure?
b) How would an economically rational consumer change their behaviour if theyrecived this information?
c) What problem would a consumer face when deciding how to behave with this additional information?

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