Saturday, October 28, 2006

Unit 2: Government intervention to overcome market failure

Free markets don't always work efficiently. These articles highlights mis-selling and the government's response

a) Which of the 6 catagories is this an example of market failure?
b) What has the government done to overcome this sort of market failure (ie which of the possible methods of intervention has it used)
c) Are there drawbacks to this method of intervention? Would alternative methods be better?

http://business.guardian.co.uk/story/0,,1932598,00.html

http://news.bbc.co.uk/1/hi/business/6087062.stm

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