Intro
Explain Market Failure
- Inefficient allocation of resources where the socially desirable outcome is not achieved
Explain causes of market failure
- Public good, merit/demerit good, externalities, imperfect information, monopoly power, immobility of factors and inequality of income.
Nature of Singapore economy
- Small, open, high reliance on trade, highly globalised
Body
Identify 3 causes of market failure faced in Singapore recently, related to globalisation such as:
- Inequality of income, immobility of labour, monopoly power & externalities
Explain each cause in detail:
- How market failure is caused with relevant graphs.
- The government policies that have been implemented.
- Evaluation of the policies and suggestions
Conclusion
- Show recognition of the many sources of market failure in Singapore.
- Comment on the relative effectiveness of the policies mentioned.
- Suggest other policies.