On Market Failure – We said that the rationale for public policy is either market failure or government failure. Address the following with this rationale in mind:
a. Define market failure from the perspective of the economist and government failure from the perspective of the political scientist.
b. Market failures are most commonly identified with negative externalizations. Provide an example of this phenomenon as well as a pro and con of government regulation as a corrective measure.
c. Lastly, provide an example of a public good and explain why it is a market failure. Be specific.