Active learning ideas
Market failure occurs when the free market, left to its own devices, fails to allocate resources efficiently or fairly. Students investigate why this happens, focusing on externalities (spillover effects on third parties), public goods (like street lighting), and information gaps. This is a crucial topic for understanding why the government intervenes in the economy through regulations, taxes, and subsidies.
Activity 01
Post images of various scenarios (a noisy airport, a person getting a vaccine, a beautiful garden, a polluting factory). Students walk around and label each as a positive or negative externality, explaining who the 'third party' is.
What causes market failure?
Activity 02
The class debates the best way to reduce plastic waste or smoking. One side argues for outright bans (regulation), while the other argues for high taxes (market-based intervention), using economic logic to support their case.
How do positive and negative externalities affect society?
Activity 03
Students discuss why a private company wouldn't want to provide street lights or national defense. They explore the 'free-rider problem' and share why government provision is necessary.
When and how should the government intervene in markets?
A few notes on teaching this unit
Watch Out for These Misconceptions
A 'public good' is just anything provided by the government.
In economics, a public good must be non-excludable and non-rivalrous. Using a 'checklist' in small groups to test items like 'public hospitals' vs. 'street lights' helps students see that many government services are actually 'merit goods,' not public goods.
Externalities only affect the environment.
Externalities can be social or economic, such as the benefit to an employer of a worker having a degree. Peer-led brainstorming of 'hidden benefits' helps expand their understanding beyond just pollution.
Methods used in this brief
Economic Aims of the Government
Students explore the macroeconomic objectives of the Irish government, including economic growth, full employment, and price stability.
8 methodologies
Taxation and Government Expenditure
An overview of fiscal policy, focusing on the types of taxation in Ireland and how government revenue is allocated.
8 methodologies