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Debunking Public vs. Private Sector Myths - Coursework Example

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The author of the paper examines the Americans economic mobility nowadays and states that previously, the American system offers people from all background the same opportunities in education and career advancement. the author also describes the types of market failures…
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Debunking Public vs. Private Sector Myths
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Debunking Public vs. Private Sector Myths

Download file to see previous pages... The situation has changed today and the Americans experience less economic mobility than before. Today, a farmer son is more likely to become a farmer than go into a more advanced professional career. This situation has been caused by escalating college costs limiting the number of people who get a chance to go to college. College today has become a major investment (Slemrod, 252). With the rising costs of living more people who are willing to enter college are unable to do so or drop out before finishing their course. The middle earners have been mostly affected compared to other classes.
True. Markets can fail due to a number of reasons which results in the value of goods produced is lower than the value of goods unproduced. There are four types of market failures which include public goods, externalities, imperfect information and market control. Public good market failure occurs because the nonpaying consumers cannot be excluded from consumption. Because of the large number of non-payers, the value of the goods produced reduces (Mazzucato, 65). Market failure from market control arises due to limited completion of the suppliers and this affects the demand and supply price. Externalities can also cause market failure by making the demand and supply price not to reflect the cost of production. Imperfect information also causes the supply price and demand price to be in disparity. This implies that the market price does not reflect the actual value of the product. It is that it is the key role of the government to address market failures. This is because there are no other interventions that can work to reverse market failures. The government can intervene by either direct government involvement in terms of production or provision in case of public goods (Slemrod, 321). ...Download file to see next pagesRead More
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