Define externalities, and explain how the market system can sometimes fail to produce efficient outcomes.

Answer the following questions by watching the following video as well. You are encouraged to do some internet research too.
Questions:
1. If there was no government, how would schools, parks, and freeways be different? Would there be enough to meet our needs?
2. Define public goods. Why should government provide public goods and services?
3. Define externalities, and explain how the market system can sometimes fail to produce efficient outcomes.
4. Define and explain the free-rider problem.
5. Give your own examples for the following two scenarios:
– Government trying to do something to make the private market better, but they end up causing a market failure.

– Government discovers a market failure caused by the private market and thecixir approach to fix it.

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