Syllabus 2.8 
​Market Failure
Syllabus 2.8 Market Failure
Additional Resources:
Plastic: market failure?
Sports wear: market failure?
PAJ - 6 market failures
Welker on Market Failure
Bhopal Disaster
Global warming: Zimbabwe
Foodie - Externalities
PAJ- Negative Externalities
PAJ-Positive Externalities
2.8 - Key Terms
1.     Market failure

2.     Welfare loss

3.     EU Emission Trading Scheme (EU ETS)

4.     extending property rights

5.     external benefit

6.     external cost

7.     marginal private costs (MPC)

8.     marginal social costs (MSC)

9.     market failure

10.  merit goods

11.  nationalization

12.  negative externalities of consumption

13.  negative externalities of production

14.  positive externalities of consumption

15.  positive externalities of production

16.  privatization

17.  public goods (non rivalrous / non excludable)

18.  free rider problem

19.  demerit goods

20.  merit goods

21.  tradable permits

22.  regulator

23.  common access resources

24.  sustainability

HL

25.  asymmetric information

26.  monopoly


Syllabus phrases to watch out for:

1.     public goods (non rivalrous / non excludable)

2.     free rider problem

3.     carbon taxes

4.     ‘cap and trade’ scheme

For HL students should watch out for the following in relation to item 41 of the syllabus:

5.     nationalization

6.     trade liberalization

note: 5+6 are possible responses to monopoly and government could use options 5 and 6 to reduce the anti competitive nature of the monopoly.