Market Failure: Food Adulteration in Bangladesh

Market failure is a failure when markets yield an inefficient output of resources leading to negative impacts on the society, nonrivalrousness in consumption and nonexclusiveness in use. Eg: the monopoly is an abuse of market power causing stagnation and idleness.

Choose one of the three types of market failure and give a real world example of it. Do you believe the government has the ability to solve this problem?

1. Name two types of market failure. Explain why each may cause market outcomes to be inefficient.

Market failure exists when the operation of a market does not lead to economic efficiency. It is a situation where a free market does not produce the best use of scarce resources. Typical examples are when externalities are present, when there is monopoly power or where it is necessary for public and merit goods to be provided by the government or even when there is possible excessive profits or

In How Markets Fail: the Logic of Economic Calamities, the author, John Cassidy, details the growth of the free market ideology. This ideology, he argues, has become an over idealized utopian notion of a self-regulating market has been expanded upon over decades to become common rhetoric that influenced policy. This driving theory became accepted into global, but specifically the American context, and led to the financial collapse of 2008 due to lax policies which encouraged risky behaviour in the belief the market would simply sort itself out, which in the end it did not. Cassidy argues that the self-regulating market in essence is a fallacy and the solution to prevent further market failures can only be obtained through a hybrid of free-market and government supervision. Cassidy effectively argues his point by detailing the historical development of the self market theory which provides a framework to later explain the market failure of 2008. Convincingly, he argues that there should be a focus on rational economics which have existed for decades but have been pushed aside in favour of the utopian self regulating market.

Market failure is a situation where pure market forces such as the operation of the price mechanism fail to produce goods at a socially optimum level. In Australia’s mixed market economy, government intervenes to correct market failures. This can lead to environmental efficiency, productivity, additional revenue and employment however it can also reduce consumer welfare and cause government failure.

MARKET FAILURE In economics, a public good is a commodity or service that is provided without profit to all members of society, either by the government or a private individual or organization. In this case, the public good that is being offered is banking services by financial institutions. Banks had yielded an inefficient output of resources, which was to provide safe deposits to the public. They were no able to perform their service when they had run out of money for its depositors to withdraw.

Karr and Council of Environmental Health. “Pesticide Exposure in Children.” Pediatrics 130.6 (2006): e1765-e1788. Web. 9 Oct 2015. . This article introduces types of pesticides that are exposed and harmful to children. Different examples of pesticides are classified and explained for its common use. Children are exposed to pesticides through ingestion, inhalation, and dermal contact. However, the most common and unintentional way to be exposed to pesticides is through ingestion in the food we eat. The article shows statistical values on the level of pesticides in fruits, vegetables, and grain products. The authors also point out that water can be contaminated with pesticides which is harmful for children. Clinical signs and symptoms of toxicity to pesticides is also addressed in the article. I will use this article to argue that levels of pesticides in non organic food is threatening to

In a free market, everyone is dependant upon one another for survival. This is due to the limited expertise each person possesses. For example, not everyone can effectively farm, or build a house, or manufacture a car, or set up a PayPal account. It

Market failure is the inability to produce the optimal or ‘best’ outcome for society. Market failure occurs when recourses are not allocated efficiently, total surplus is not being maximised. Market failure can be caused by:

In 2007, the market crash in America led to thousands of unemployment and stress. Not just to the United States, but to the world also. Not only does it slow down China’s economic growth but also slows down all other foreign exporters to the United States. There can be many market failures in economics though. In economics, market failures are also known as situations where the allocation of goods and services isn’t efficient which basically says that the supplies and demands are not in balance. Monopoly is a type of system where only one foundation gets to govern or control the supply. In many cases, the foundation gets to bully and control what it can do with the supply. For example, PG&E as the foundation, is the biggest and strongest

("How toxic are these pesticides"). At least 382 of the chemicals that the U.S. EPA lists as inert ingredients were once or are currently also registered as pesticide active ingredients. This means that the public is kept in the dark about the contents of pesticide products that may be hazardous. Among the ingredients that are listed as both inert and active ingredients are chloropicrin, which has been linked to asthma and pulmonary edema, and chlorothalonil, a probable human carcinogen (Problems with Pesticides”).The public doesn't really know about the contents in pesticides products such as Chlorothalonil, which causes asthma and pulmonary edema(“Problems with pesticides”).Some foods that are highly contaminated are Peaches, Apples, Strawberries, Grapes, Cherries, Nectarines, Pears, Red Raspberries,Potatoes and tomatoes("The Dirty Dozen").Some food that are less contaminated consists of Onions,Sweet Corn,Sweet Peas,Bananas,Cabbage ,Broccoli ,and Papaya (“The Dirty Dozen”).Pesticides cause many health effects with farm produced products sprayed with

The second market failure is information asymmetry. In most markets, suppliers and consumers do not have the same information. Foods and beverages consumers know far less about the information of products than suppliers. A consumer may think that a certain food is low in sugar and fat because they do not have the nutritional information of the food, and thus decide to eat more of the food than they would if they knew that information. Consumers do not have ability to make a better choice. This situation leads to an over allocation of resources to foods that are high in fats and

The mechanics of the food preparations and the additives were called into question that led to the involvement of the Food Standards Agency and together with the local team from the Environmental Health. Since

Food and food products purchased in supermarkets around the world are known to have chemicals to kill bacteria, improve food safety, and increase shelf life. According to an article on Waking Times, meat and poultry purchased in markets are known to have at least 10 chemical additives including Sodium Benzoate, Sodium Proprionate, Benzoic Acid, Nitrites and nitrates, as well as traces of antibiotics that were given to the animals (Longo). However there is another way to fight off bacteria and harmful organisms, and its food irradiation. Irradiation does not make food radioactive, compromise nutritional value or noticeably change the taste of food (“Food irradiation: What you need to know.”). Irradiated food is more expensive to produce due