Caribbean Advanced Proficiency Examination

Economics Unit 1

Name of Candidates: Adriana Brandt

                                 Ricardo Carter

                                 Rebecca Junor

Centre Number: 090045        

Name of teacher: Ms. Kellman

Territory: Guyana

Year of Examination: 2020

Title: Evaluate the measures used by the government to correct the market failure within Guyana
Water Inc.

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 Tittle Page 

 Topic: Market Failure 

Tittle: An investigation into the factors that cause market failure and to evaluate   the measures
used by the government to correct the market failure within Guyana Water Inc. (GWI)

Aims and Objectives

To investigate causes of market failure for GWI.

To examine the economic situation that influences market failure

To assess the level of dependency GWI has on the Government of Guyana

To assess what measures can be taken to resolve the issue of market failure.

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  Table of Contents

Acknowledgement

Title Page

Table of Contents

Introduction

Methodology

Presentation of Data

Interpretation and Analysis

Conclusion

Findings

Recommendations

Bibliography

Appendix

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 Introduction

Market failure is the economic situation defined by an inefficient distribution of

goods and services in the free market. Furthermore, the individual incentives for
rational behaviour do not lead to rational outcomes for the group. Put another way,
each individual makes the correct decision for him/herself, but those prove to be
the wrong decisions for the group.

The Guyana Water Incorporated (GWI) was established on May 30, 2002,
resulting from the merger of the Guyana Sewerage and Water Commission
(GS&WC) and the Guyana Water Authority (GUYWA).

   The main driver for improving the water sector in Guyana is the reduction of
poverty amongst the population. GWI provides water to over 145,000 homes,
offices and schools across Guyana. It also provides water to Amerindian
communities in the Hinterland. The Company aims to supply water facilities to
80% of the Hinterland settlements.

  The Company employs over 500 workers and supplies over

300, 000,000 litres of water per day. GWI operates 24 sewerage pumping stations
in Georgetown. In addition, the Company has water treatment plants at Mon
Repos, Pourdroyen, Fellowship, Golden Grove, Queenstown, Cotton Tree, Lima,
Vergenoegen, Better Hope, Covent Garden, Eccles, Bartica, Sophia, Central
Ruimvedlt and Number 56 Village.

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                  Methodology

"A questionnaire example is a tool for data gathering and research that consists of a
set of questions in a different form of question type that is used to collect
information from the respondents for the purpose of either survey or statistical
analysis study. “The researchers choose to use this method because:

1. Questionnaires are inexpensive

2. Questionnaires are practical

3. Questionnaires offer a quick way to get results

4. Scalability

5. Comparability

6. Easy Analysis and visualization

7. Questionnaires offer actionable data

8. Respondent anonymity

9. Questionnaires don’t have time constraints

10.    Questionnaires can cover every aspect of a topic

But there is also a limitation such as:

1. Dishonest answers

2. Unanswered questions

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3. Differences in understanding and interpretation

4. Hard to convey feelings and emotions

5. Some questions are difficult to analyse

6. Respondents may have a hidden agenda

7. Lack of personalization

8. Unconscientious responses

9. Accessibility issues

10.    Questionnaire or survey fatigue

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 COVER LETTER

Dear Respondents,

We are Sixth Form students of St. Joseph High who are currently in the process of
completing our School Based Assessment. We are conducting a research on the
topic, Market Failure.

We are kindly asking for your permission in answering the questions that are
attached to this letter. The questionnaire doesn’t require your name so your
answers will be kept confidential and will only be used to complete this research.

Thank you for your kind cooperation

Yours sincerely,

Group 2,

……………………………..

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 QUESTIONNAIRE

1. How old are you?

20-30

31-40

41-50

51-60

2. How long have you worked with Guyana Water Inc.?

1-10 years
11-20 years
21-30 years
Over 30 years

3. What is your job title?

Manager
Supervisor
b. If other please state

4. Which department of Guyana GWI do you work with?

Human Resource Department
Production Department

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Finance Department
If any other please state…………………………………………………………

5. What do you think is market failure?

The situation where the goods and services being produced are not equivalent
to the demands of society, thus resulting in economic loss.

The situation where the goods and services being produced surpass the
demand of society, thus resulting in economic loss.

The situation where the goods and services being produced are insufficient to
meet the demand of society, thus resulting in economic gain.

6. What type of Market Structure does Guyana Water Inc. have?

Perfect       Monopoly Oligopoly      Monopolistic Competition

7. What is   Guyana Water Inc. major role in contributing to our economy?

Provide Water        Employment   Contributes to GDP

8. How does the Government influence Guyana Water Inc.?

Provide Subsidies

Provide Training

Through taxes

9. What do you think is the main cause of market failures?

High Production Cost

Outdated Technology

Imperfect Markets

Negative Externalities

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Indivisibilities

If any other please sate…………………………………………………………….

10. What are the economic situations that influence market failures within Guyana
Water Inc.?

Positive and Negative Externalities

Environmental Concerns
Abuse of monopoly power
If any other please state……………………………………………………………

11. What measures can be taken by the Government to resolve the above issues of
market failure?

Laws and Regulations Government Price Control

Tax Nudges

Subsidies Pollution Permits

A ban on negative externality

If any other please State……………………………………………………………...

12. Rate on the scale of 1-5 the dependency of GWI has on the Government (1 being least
dependent and 5 being most dependent).

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 Presentation of Data

Fig:1

Market Failure
The situation where the goods
and services being produced are
not equivalent to the demands
30% of society, thus resulting in
economic loss.
The situation where the goods
and services being produced
45% surpass the demand of society,
thus resulting in economic loss.
The situation where the goods
and services being produced are
insufficient to meet the demand
of society, thus resulting in
economic gain.

25%

Graph illustrating what people think about market failure. This question tested the
respondents’ knowledge on market failure.

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 Fig: 2

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 Interpretation and Analysis
A total of 20 questionnaires were distributed to employees of GWI. The participants were
advised to choose the option/s that is most applicable to the question. This analysis will relate the
responses given by the participants and these will be supported by the theoretical knowledge.
Figure1 provided information about the respondents. This assessed their prior knowledge of
Market failure. The correct response was the first option which gives the definition of market
Failure. *put definition*

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