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IA: The article is about “Plastic Bag charged introduced in England”. “Plastic bags used for just a few minutes but take 1000 years to degrade”. Therefore when resources are not used efficiently, market failure arises, which is a situation in which the market does not allocate resources efficiently. Therefore plastic bags are negative externality of consumption, which is when a third party is affected by the consumption of goods and services for which no appropriate compensation is paid. The negative externalities of consumption produced here make the marginal social benefits less than the marginal private benefits. The marginal social benefit is equal to the marginal private benefits plus the external benefits. If the plastic bags are over-consumed, then for some of those goods, the overall cost to society is greater than the benefit received. The graph below shows the effect of a negative externality of consumption. According to the article, people who enjoy free disposable plastic bags enjoy the private benefits of the plastic bag, but there will be external costs for other people. Because this is a free market, consumers will maximize their private benefit, ignore the effects on others and not consume at the socially optimal level, which is MSC = MSB. This means they will over-consume the plastic bags at the output of Q1. We can see that Q1 is not the socially efficient output of Q*, where the marginal costs is equal to the marginal social benefit. Therefore since marginal benefit is not equal to marginal costs, the market failure results in a welfare loss. Therefore a free market is not desirable as maximizing their utility is priority. So government is expected to correct the market failure by choosing to char... ... middle of paper ... ...e government can use to reduce the consumption of the plastic bags without causing a burden to the consumers initially is through funding negative advertising. However this creates opportunity cost, which is the cost of an alternative that much be forgone in order to pursue a certain action. This will cause MPB curve to shift to left, towards the MSB curve. However this is a disadvantage towards the government as it cost a lot for funding advertisement. Therefore this would lead to an increase in taxation causing burden to the consumers whether they consume plastic bags or not. However if only indirect taxes are implemented, the revenue could be useful to fund not only negative advertising, the consumers who wish to relieve the taxation burden could change to other uses to carry their groceries such as a shopping bag that can be used over many times.
A market where people can buy healthy, sustainable, organic local foods and goods, all without the marketing ploys and harmful environmental effects of wasteful packaging. It has been reported that 23% of all landfill waste is excess packaging, and certain modifications in types of packaging, like tin-foil liners in burger cartons or wrappers, makes then unable to be recycled and also inhibits their decomposition (EPA). By sourcing from local farmers and growers, and eliminating excess waste, the cost-effectiveness is passed on to the community
A considerable viewpoint for answering these questions has been presented by Professor Dwight R. Lee, in his article "Market and Freedom". This article is an attempt of providing some visions to protect the values of free market economy.
Market failure in a free market is defined as a condition where the allocation of goods is inefficiently done, resulting in an over allocation or under allocation of its resources. Market failures occur due to the presence of externalities.
This paper aims to provides a full understanding of the free market system and how it can potentially benefit individual’s needs. The free market system is fully explained and classical economist’s views are considered separately as well as in contrast with one another. The specific economists discussed include Ricardo, Marx, and Mill. Their individual opinions on how the free market system could impact the economy is examined and the effects of an economic system controlled by the government is also discussed.
Using plastic bags were something everyone feels bad using. We use them everyday in some form or another, but we tend to forget the bad that they do. Plastic bags should not be used or allowed in the U.S because it tends to do more harm than good in our society or world.
Most of the necessities humans need are provided in supermarkets, in fact supermarkets have become a necessity for our everyday life. They are now the main source of water, food, clothes and everyday tools. Therefore, the plastic bags demanded and supplied in this industry increase every day. In the past decade, we produced as much plastic as we did in the whole twentieth century (Freinkel, 2011). This exponential increase of a non-biodegradable material has negatively impacted our environment immensely. Plastic production requires our dwindling fossil fuel resources, robs away animal lives, litters our beautiful landscapes and even affects our very own well-being. Hence, if plastic production doesn’t diminish immediately, we will suffer great
The solution is thought to be the use of reusable bags. Reusable bags are an item that stores offer to the customers to use rather than plastic bags. Reusable bags are typically made out of some type of fabric. The title of the bags gives the main purpose of what they are capable of doing. Along with helping the environment, reusable bags also make it so that people can use them as many times as he or she wants to. Also some stores even offer an incentive with discounts off he or shes bill for using the reusable bags as
This view implies that governments intervene for many reasons, including the redistributional and stablisation functions. While market failure is one reason for intervention, other considerations, including questions of equity and social justice determined the nature and the extent of government intervention. This point was expanded upon by Groenewegen (1990,2) who argued that the extent of market intervention in the supply, distribution and redistibution of goods and services are not dictated by purly political and ideological considerations, other considerations may play a role including the failure of the market in certain instances to ensure efficient, equiable allocation of resources.
In analysis of market failure, a distinction should be drawn between partial and complete market failures. While the later implies a functional market with ineffective function the former describes a complete non-functional market with inability to supply the market with required goods o...
Before the public choice era, a traditional economist would approach the analysis of public policy through the concept of Pareto optimality (Lemieux 2004). Pareto optimality is defined as an efficient allocation of resources, where there is no way to reallocate resources to benefit some individual without harming another individual (Edgar Browning & Jacquelene Browning 1994). However, market failures can cause an inefficient allocation of resources. A few illustrations that generally lead to market failures include externalities and public goods. Governmental intervention through the development of public policy is commonly used to correct for such market failures. Over time, studies on public policy lead to a change in the way economists evaluated
Today, more than ever, there is great debate over politics and which economic system works the best. How needs and wants should be allocated, and who should do the allocating, is one of the most highly debated topics in our current society. Be it communist dictators defending a command economy, free market conservatives defending a market economy, or European liberals defending socialism, everyone has an opinion. While all systems have flaws and merits, it must be decided which system is the best for all citizens. When looking at the financial well being of all citizens, it is clear that market economies fall short on ensuring that the basic needs of all citizens are met.
Using plastic bags are second nature to people in this day and age. Warner acknowledges, “Much to the dismay of the environmentally conscious citizens worldwide, the ubiquity of the free plastic carryout bag has bred nonchalant consumers who take this modern convenience for granted” (646). Although some people are conscious about the environment, people strive more for convenience and do not think about the impacts using bags have not only on the environment, but on themselves as well. If something is bad for the environment, it will alternatively be bad for humans as well. When plastic bags are exposed to the sun from being littered all around, the ultraviolet rays cause the substances of plastic bags to weaken. After the substances weaken, the substances become invisible to the naked eye. The substances that are no longer able to be seen are toxic to humans (Warner 649). As a result of plastic bags being littered around, animals consume plastic bags. This is negatively affects humans because animals are often consumed. When humans consume animals like, fish, there can be plastic in the fish’s belly, which then transfers to the humans and this poses a concern for human’s health. Humans are negatively affected by plastic bags because of the toxic chemicals in plastic bags, as well as, consuming animals with plastic in their
This essay will discuss the various harmful effects of plastic bags, and demonstrate the risks that these bags impose on humans, animals, and the environment. It will also discuss a series of suggested solutions that could help reduce plastic bag usage. Although plastic bags appear to be fragile and light, their negative environmental effect is devastating. Plastic bags may cause large amounts of pollution at every step of their limited life cycle, from the extraction of raw materials, production, transportation, and recycling or disposal. Plastic bags can be defined as the most damaging form of environmental pollution.
Market failure has become an increasingly important topic for students. In simple terms, market failure occurs when markets do not bring about economic efficiency. There is a clear economic case for government intervention in markets where some form of market failure is taking place. Government can justify this by saying that intervention is in the public interest.
Everyone has heard a cashier one time or another mumble, “Paper or plastic?” as he put their groceries in a bag, but do shoppers know the effects of each vessel in which they carry their comestibles? There are many issues and benefits to both paper and plastic. The making and recycling of both paper and plastic bags can harm the environment. One must also look at the costs of making each bag. The convenience of each is also something to look at. Many people jump to conclusion that paper bags are better for the environment without knowing the facts. Since plastic bags are preferred by customers and plastic bags actually do not hurt the environment as much as paper ones do, consumers should feel at ease when choosing plastic.