Markets and the Economics of the Public Sector

Markets and the Economics of the Public Sector. In Week 2, each learning team will employ the supply and demand model to develop consumer surplus and producer surplus as a measure of welfare and market efficiency. Students learn about welfare economics–the study of how the allocation of resources affects economic well-being–and will discover that under most circumstances, the equilibrium price and quantity is also the one that maximizes welfare. Students will review different sources of externalities and a variety of potential cures and will see that while markets are usually a good way to organize economic activity, governments can sometimes improve market outcomes. Students will see how the U.S. government raises and spends money and the difficulty of making a tax system both efficient and equitable.ÿAssignment StepsÿScenario:ÿImagine your learning team has been assigned the responsibility of preparing a paper for the governor’s next economic conference.ÿPrepareÿa 400-word paper addressing the following:Discuss how externalities may prevent market equilibrium and the various governments policies used to remedy the inefficiencies in markets caused by externalities.Citeÿa minimum of three peer-reviewed sources, not including your textbook.Formatÿconsistent with APA guidelines.

Markets and the Economics of the Public Sector