Lecture Macroeconomics (19/e) - Chapter 5: Market failures: Public goods and externalities

After reading this chapter, you should be able to: Differentiate between demand-side market failures and supply-side market failures; explain the origin of both consumer surplus and producer surplus, and explain how properly functioning markets maximize their sum, total surplus, while optimally allocating resources; describe free riding and public goods, and illustrate why private firms cannot normally produce public goods;...