1.3.5.1b - Sources of market failure: • externalities • the free-rider problem; non-provision of

Sources of market failure:; externalities; the free-rider problem; non-provision of public goods; imperfect market information; moral hazard; speculation and market bubbles.

Use b - sources of market failure: • externalities • the free-rider problem; non-provision of to connect the rule to the data and decision in the question.

This matters because b - sources of market failure: • externalities • the free-rider problem; non-provision of determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - sources of market failure: • externalities • the free-rider problem; non-provision of to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Sources of market failure: • externalities • the free-rider problem; non-provision of is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.