Hi people!

In review of the lectures this week, we have learnt:

• Market failure occurs whenever price mechanism fails.
• Economic efficiency in achieved when market is Productively efficient and Allocatively efficient. (MSB=MSC)
• Private Cost/Benefit is cost/benefit to a individual producer/consumer
• Externalities is cost/benefit affecting someone not directly involved in production/consumption of good, without compensation.
• Externalities in Production: Firms ; Externalities in Consumption: Individual
• Social Cost/Benefit=Private Cost/Benefit + Externalities in Production/Consumption
• Cost: Supply ; Benefit: Demand

Here are the questions, start posting!

1. Would a ban on plastic bags achieve Economic Efficiency in Singapore? Explain your answer.
2. Which type of externalities do the use of plastic bags constitute? Give examples.
3. Suggest alternative measures other than banning the use of plastic bags.

Here are some websites, hope that they will be helpful!

1. http://app.nea.gov.sg/cms/htdocs/article.asp?pid=2859
2. http://app.nea.gov.sg/cms/htdocs/category_sub.asp?cid=246
3. http://www.wildsingapore.com/news/20070506/070505-1.htm

Zhen Qiang