Originally posted by Bellofemme:bras are normal goods okay, they're necessities. so got less than proportionate increase in quantity demanded when income increases because once satiation is reached, cannot buy more. so bras aren't weird pls. haha
darn... did we have to write that? :o
but im still looking for ppl who attempt qus 3 paper 2 LOL... and tml is International hist! sian la...
I did qn3 p2. Haha.
You want the outline?
LOL.
Market fail when pareto efficiency not met. Pareto efficiency = Allocative + Productive efficiency
Factor immobility = E.g Labour. Skills are unique to each job. So when there is a change in structure of ecy, skills mismatch. Hence labour immobile between jobs. With structural unemployment,not all resources are utilised. So P.E not met. Also deadweight loss of human capital.
Imperfect info on benefits/costs = over/underconsumption
Part b) just write about labelling to correct imperfect knowledge. Suggest bigger and clearer labelling. Then for factor immobility write about WDA and Lifelong learning fund. Then evaluate that people may not necessarily go for retraining.
I did 3,4,5 btw.
haha i start off with this
Market failure refers to an unregulated market that fails to produc a socially efficent output whereby MSB=MSC
LOL then i cant remember liao then i say no perfect information are markets that have no perfect information and they are imperfect markets (Monopoly etc...) then i said a monopoly fails to produce its socially efficieny output... the charges P>MC lalala... then and its allocatively inefficent...
Part b i tok about soving negavtive externatlites in produciton... MC pricing for monopoly... then Subsidies regulations and stufss... so i guess i wrote off point! LOL
you need to write about monopoly inefficiency, external cost/benefit, merit/demerit good. bascially all cases of causes of market failure.
i only wrote external cost... damn!