September 27, 2010
BUS 345 Essay #1
What is the basis for the contention that governments should intervene to correct market failures? (Be sure to explain what market failures are and why they are significant without providing superficial, rote definitions.) Contrast this with the argument that laissez faire is preferable to intervention. (If possible, link this to the idea of government failure, the iron law of public policy, rent seeking, and unintended consequences.)
Imagine a grading rubric in which failure is considered everything except perfection. In the academic world this seems absurd but in economics whenever markets deviate from any of the ideal conditions necessary for perfect competition the result is measured as a failure. Although the term “market failure” seems to suggest some sort of catastrop...