In this lesson, we will begin our look at why using government to attempt to correct market failures may not always be a good idea. There are times when using government does not improve aggregate welfare over a market outcome, and there are some cases when using government to do this actually makes things worse. We will talk in this lesson about some of the main underlying causes for this.
What will we learn?
By the end of this lesson, you should be able to:
- understand the concepts of public goods;
- define and explain rivality and excludability;
- know the difference between public, private, club and common pool goods;
- explain what the concept of "methodological individualism" means;
- understand the general concept of public choice theory;
- define and explain "rational ignorance;"
- describe what a bureaucracy is;
- explain why bureaucracies exist;
- explain how bureaucracies are self-interested, and what this results in;
- describe the relationship between politicians and the agencies they oversee.
What is due for Lesson 8?
This lesson will take us one week to complete. Please refer to Canvas for specific time frames and due dates. There are a number of required activities in this lesson. The chart below provides an overview of those activities that must be submitted for this lesson. For assignment details, refer to the lesson page noted.
|Requirements||Submitting Your Work|
Please read Chapter 6 in Gwartney et al. OR Chapter 13 in Greenlaw et al.
And links to other reading contained in the lesson text.