Explanation Generally when the market fails to produce and distribute its goods and services efficiently, it is termed as a market failure. Here the author explains that the market failure is due the inefficient allocation of farmland for other uses. The conversion of farmland to developed land is termed as inefficient allocation of the land. This inefficient allocation of land is an important reason for the market failure. The efficient allocation of farmland is explained with the help of a figure as shown below: Figure 1 shows the shift in the supply curve of the farm land.

null Edition

ISBN: 9781323880203

Author: Pearson

Publisher: PEARSON C

See similar textbooks

Question

Chapter 5, Problem 5.1.13PA

To determine

What is a market failure.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Chapter 5, Problem 5.1.12PA

Chapter 5, Problem 5.2.1RQ

Chapter 5 Solutions

HIS 112

Ch. 5 - Prob. 5.1.1RQ Ch. 5 - Prob. 5.1.2RQ Ch. 5 - Prob. 5.1.3RQ Ch. 5 - Prob. 5.1.4RQ Ch. 5 - Prob. 5.1.5RQ Ch. 5 - Prob. 5.1.6PA Ch. 5 - Prob. 5.1.7PA Ch. 5 - Prob. 5.1.8PA Ch. 5 - Prob. 5.1.9PA Ch. 5 - In a study at a large state university, students...

Knowledge Booster

Similar questions

Give an example of a positive externality and an example of a negative externality.
Draw a standard supply and demand diagram for televisions, and indicate the equilibrium price and output. a. Assuming that the production of televisions generates external costs, illustrate the effect of the producers being forced to pay a tax equal to the external costs generated, and indicate the equilibrium output. b. If instead of generating external costs, television production generates external benefits, illustrate the effect of the producers being given a subsidy equal to the external benefits generated, and indicate the equilibrium output.
A country called Sherwood is very heavily covered with a forest of 50,000 trees. There are proposals to clear some of Sherwoods forest and grow com, but obtaining this additional economic output will have an environmental cost from reducing the number of trees. Table 12.11 shows possible combinations of economic output and environmental protection. Sketch a graph of a production possibility frontier with environmental quality on the horizontal axis, measured by the number of trees, and the quantity of economic output, measured in corn, on the vertical axis. Which choices display productive efficiency? How can you tell? Which choices show allocative efficiency? How can you tell? In the choice between T and R, decide which one is better. Why? In the choice between T and S, can you say which one is better, and why? If you had to guess, which choice would you think is more likely to represent a command-and-control environmental policy and which choice is more likely to represent a market-oriented environmental policy, choice Q or S? Why?

Recommended textbooks for you

Principles of Economics, 7th Edition (MindTap Cou...
Economics
ISBN:9781285165875
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Essentials of Economics (MindTap Course List)
Economics
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Economics (MindTap Course List)
Economics
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:9781305971493
Author:N. Gregory Mankiw
Publisher:Cengage Learning
Exploring Economics
Economics
ISBN:9781544336329
Author:Robert L. Sexton
Publisher:SAGE Publications, Inc
Principles of Microeconomics
Economics
ISBN:9781305156050
Author:N. Gregory Mankiw
Publisher:Cengage Learning