Category: Grade 10 Individuals and Societies

If school is cancelled due to bad weather continue working on Market Failure

Market failure assessment

You all worked on one of these articles and we discussed some of the issues. We also discussed more about direct and indirect, private and third party effects using the worksheet. We can now do this as a formal assessment. So you can continue working on it and follow the layout below. You have already done a lot of this so think about how you might present it. You may work with your partner or alone. You may even choose to focus on a different article if you wish. We will go over this next lesson to make sure it is clear, so not to worry you have plenty of time. 


1) Summarise what the main point of the article is – point out any controversy

2) Explain why the market is failing to be efficient (at equilibrium)

3) Identify the private and third party costs and or benefits

4) Identify the stakeholders in the market and explain if they are hurt or helped and why

5) Explain 2 or 3 possible solutions and evaluate how well they might work given the context of the situation. Evaluate which one is best suited to address the imbalance.


You may use a diagram to explain your reasoning – look at those on the worksheet.

Judgments are made that are supported by effective and balanced reasoning.

  • Make judgments – be specific about what you think.
  • Support judgments with appropriate reasoning – explain why you came to that conclusion and mention the evidence you have for making assumptions or synthesising points.

Consider alternative points of view (be clear about specific stakeholders) or alternative outcomes to the ones you have discussed. Also support these alternatives or rank in order of priority/effectiveness. Give room for claims and their counterclaims.

Here is an example.

In groups of 2: Pick a recent article depicting a market failure and analyze it using the 5 points above. You will present your findings to the class.

  • Presentations should be between 3 and 5 minutes long
  • You may record a video

Hyperlink your presentations here.

TSC (A C & D)

Due date: Monday 12th Feb for both 10 B & 10 D

Market Failure

InS 10: Introduction to Market Failure

See this doc It has a simple intro

In groups, discuss:

  • What do you know about pricing?
  • How do companies calculate the cost of a good?
  • Why are similar goods sometimes priced differently?
  • Why are goods different prices in different places?

Once again:

  • What is supply and demand?
  • Give a concrete example

What is missing in the supply and demand equation?


Market failure is when pricing mechanism leads to an inefficient allocation of (scarce) resources and loss of economic welfare

Today, we will only consider 2 types of market failure: positive and negative externalities

Externalities are the consequence of an industrial or commercial activity which affects other parties without this being reflected in market prices

  • What is not included in the price of:
    • Cigarettes?
    • Cars?
    • Tree planting?
    • Education?

How can we adjust prices, now that we know their externalities?


Externalities do not have to be about pricing. Any activity that has an unintended impact on a third party can be seen as an externality.


Exercise 1: In your table groups

  1. Define and give one example of:
  • Private cost
  • Social cost
  • Social benefit

2. Explain 2 positive and 2 negative externalities  in the school. (Social benefit and social cost)


Exercise 2:  In groups of 2

Read one of the following articles, describe it to the class while explaining:

Exercise 3: As a class, we will play Externalities mystery!

You will be divided into 8 groups of 2 or 3

  • Each group will briefly explain wether the hospital should be built or not, base don their card’s perspective.
  • We will then have small discussions on wether or not the hospital construction should go ahead.
    • What were the reasons for your decision?
    • Why were those reasons more significant than any other reason?
    • What other factors might it depend on?
    • What else might you want to know before making a final choice?


  • Which costs are private costs/benefits, and which are external?
  • Can we put a value on any of these externalities?
  • Who is likely to benefit/suffer the most as a result of the hospital project?

If time:

How is Christmas an externality?

Or spot all the externalities in Dr Seuss’ the Lorax

Beach study homework Grade 10

You should all be working on your beach study analysis.  Your hypotheses 1 and 5 anlysis should be done by next lesson.

10 D we will go over some graphing techniques for the other graphs on Monday.

10 B we already did this today (Thursday ) so you can begin graphing for analysis 2, 3 and 4 over the weekend.


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