Module code: F7J8 34

Module title: Economic Issues: An Introduction

Report title: Market Failure and The Role of Government

Tutor name: Baurzhan Aldabergen

Student ID: 177239526

Date of submission: 15.02.2018

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Table of Contents

1. Market Failure……………………………………………………………3
a) Public goods……………………………………………………...3
b) Merit goods……………………………………………………….3
c) Externalities………………………………………………………3
Externalities………………………………………………………4
d) Imperfect competition…………………………………………….4
2. UK Government policy on the environment. ……………………………4
Waste management control…………………………………………...5
3. Reference list……………………………………………………………...8

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 1. Market failure it is a situation where particular stimulus for reasonable behavior do not
direct to reasoned results for group. Market failure happens when there is an ineffective
distribution of resources in a free market. Market failure can happen due to a diversity of
reasons, such as imperfect competition, externalities, public goods and merit goods. Market
failure it is when market not able to do his function while limited resources are not being
distributed. As a rule, the market failures include insufficient competition. Also market
failure includes inflation, and unemployment. In these cases the actions of sellers and
buyers become uncontrolled.
a) Public goods are a combination of goods and services that are provided to the population
on a free basis, at the expense of the state's financial resources. A public good has two
characteristics: Non-rivalry and Non-excludability.

Public goods is often turns out in a free market because his characteristics are Non-rivalry and
Non-excludability indicate that there is a stimulant not to pay. Examples include street lights and
national defense. Typically, they are not provided in free market because firms cannot charge
people. For instance, lighthouse is a public goods because lighthouses needed for fishermen.
Fishermen can not to build by themselves, but at the same time they need to catch fish and therefore
the government understand this and begins to build lighthouses. The reason why the government
agree to build lighthouses that If the fisherman won’t catch the fish that GDP of country will
decrease.

b) The next is merit goods. Merit goods is almost like public goods. In this case the
government encourage the deal of people in order to improve and increase government
income. Examples of Merit Goods: public libraries, galleries, education, health
programmes and so on. For instance transport services. The most of people use buses in
order to get to somewhere. And government will encourage transport services because it
will bring them some benefit. Because If people will go to work and earn money they will
spend on their needs. And it also increase the income of government and income of
transport company.
c) Externalities occur in an economy when the production or consumption of a specific good
impacts a third party that is not directly connected to the production or consumption.
Externalities, such as pollution, are one of the main reasons why governments step in with
increased regulations. Most externalities are negative. Pollution, for example, is a well-
known negative externality. Some externalities are positive. Positive externalities happens
when there is a positive gain on both the private level and social level. Externalities are
probably the argument for government intervention that economic expert most regard. For
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 instance, oil is connected with pollution because it is directly influence for environment.
We convert oil and it is harmful because before this we mine oil from earth and it can harm
our planet. And this can lead to illness of people, increase continuous of our life. This is
negative externalities. Government establishes special rules for producers, in order to
reduce harm to environment. On the other hand producers don’t always perform rules. So
they effect on departments of environment protect. This is market failure, because market
can’t able distribute resources.
d) Imperfect competition, in which a competitive market does not meet the above conditions,
is very common. Examples of imperfect competition include oligopoly, monopolistic
competition, monopsony and oligopsony.

In an oligopoly , there are many buyers for a production or service but only a few vendor.
Monopolistic competition describes a marketplace which has a lot of purchaser and sellers, but
whose companies sell greatly different products. Consequently, the condition of perfect
competition that products should be identical from company to company is not met. The
restaurant, cafes, clothing, mobile connection, travel agencies and shoe industries all exhibit
monopolistic competition. Monopsony and oligopsony are counterpoints to monopoly and
oligopoly. Instead of being brand up of many purchasers and few marketers, these unique markets
have many sellers but few buyers.

The government sets special rules for the market of imperfect competition, because the
government must control prices, especially for essential goods. If prices are too high for essential
goods, then society will not be satisfied and will reduce consumption, health costs. This is a market
failure, because the market can not distribute resources.

2. A government policy application is a revealing of a government's political events,

arrangements and aims identifying to a certain reason or, during the jealousy of office, an
entire legislative session.

Government implement this policy because this is the market failure. The market won’t do it
because this is not profitable for him. Market has plants which bring profit and their goods need
for citizens and government. However, the production bring the damage to environment. In this
way the government create legislation acts and establishment which controls the system.

Environment is a collective term describing the network of agreements, regulations, usual and
ordinary laws addressing the results of human working on the natural environment.

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The main problem of environment policy is directed to promoting to sustainable economic
expansion and to the health and safety of people by supporting and improving the quality of the
environment.

Waste management is the operation of healing solid wastes and offers diversity of solutions for
recycling items that don’t belong to rubbish. It is about how garbage can be used as a valuable
resource. Waste management is something that each and every household and business concern
possessor in the world needs. Waste management disposes of the products and materials that you
have use in a safe and effective method.

The development of waste management law has followed a identification number of different ways
around the world. There are clearly a number of reasons for this; one of the reasons considered
here is the legal system in the respective States.

The polluter-pays rule is a rule where the polluting party pays for the effect induced to the
environment. With respect to waste management, this in total treat to the requirement for a waste
generator to pay for suitable disposal of the unrecoverable material.

For instance, plastic bags.

They use plastic bags in the UK fall by 85% in 2016. The reason of decline is the was implement
tax in 5 pence for plastic bags in supermarket.
For the first half of 2016, the English used only 500 million plastic bags. During the same period
last year, 7 billion packages were used. A more effective tool for disseminating information about
the dangers of plastic for natural ecosystems is the tax on packages.

If other countries introduced a similar tax, this would probably have a positive effect on the state
of the environment. Every year, 8 million tons of plastic fall into the oceans and seas. This material
has a negative impact on the state of marine ecosystems.
The tax was decided to enter after the number of packages used by supermarket buyers increased:
from 6 billion in 2010 to 7.6 billion in 2015. In the year the average buyer used 140 packages. 7.6
billion plastic bags - this is 61,000 tons of plastic waste.
The environment rules of legislation.

The EU Waste Framework Directive

Waste matter is recovered or disposed of without endangering homo health or causing scathe to
the environment and includes permitting, registration and inspection requirements. The bar or
reduction of waste production and its harmfulness and secondly the recovery of waste by agency
of recycling, re-use or reformation or any other appendage with a view to extracting secondary
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coil raw materials, or the use of waste as a beginning of Department of Energy . The directive’s
requirements are supplemented by other directive for particular waste current .

The Waste (England and Wales) (Amendment) Regulations 2012

Waste collection authorities must collect waste paper, metal, charge plate and trash separately.

Environmental permitting for waste

The recovery and disposal of waste requires a preventing harm to human health and the
surround.

Hazardous waste regulations

Hazardous waste is essentially waste that contains hazardous properties which if mismanaged
has the potential to cause greater scathe to the environment and man health than non-hazardous.
As a result , strict controls apply from the tip of its production, to its movement, management,
and retrieval or disposal.

Waste shipment regulations

Waste management between the UK and other land is established and a theoretical account for
enforcing compliance is established. Some bm are prohibited, others are subject to prior written
telling and consent procedures, and some are subject to basic administrative control. Ascendence
depends on the nature of the waste, its purpose and whether it is intended for recovery or
disposal.

Electrical and electronic equipment

Legislation is aimed at limiting the impact of electrical and electronic equipment on the
surroundings when it has reached the remainder of its spirit . It does this by minimizing the
hazardous substances of legislation regulating hazardous substances in electrical equipment
throughout the community.

Landfill directive

Establish strict technical requirements for waste and landfill and set aim for reducing
biodegradable municipal waste entering the landfill.

Batteries directive

This directive is aimed at improving the surround al performance of shelling and minimizing the
impact of remote control bombardment on the environment. He does this by: limiting the use of

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cadmium and mercury in the development and manufacture of new batteries, brass of
assemblage and recycling targets for portable storage batteries, Bachelor of Arts in Nursing on
the removal of unprocessed automotive or industrial batteries in a landfill or incineration.

Control waste it is important factor which manage government.

If the government didn’t control waste, It will lead to pollution of the whole world and also lead
to increasing of citizens, childbirth, labor and economic.

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2017].
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