Gordon Rule 1Explain the two causes of market failures.

Gordon Rule
1Explain the two causes of market failures. Given their definitions, could a market be affected by both types of market failures simultaneously?
2Use the ideas of consumer surplus and producer surplus to explain why economists say competitive markets are efficient. Why are below- or above-equilibrium levels of output inefficient, according to these two sets of ideas?
3What are the two characteristics of public goods? What is the free-rider problem as it relates to public goods? Is U.S. border patrol a public good or a private good? Why? How about satellite TV? Explain.
4 What divergences arise between equilibrium output and efficient output when (a) negative externalities and (b) positive externalities are present? How might government correct these divergences? Cite an example (other than the text examples) of a positive externality and a negative externality.