Market Failure

Obesity
Summary

• Cost on obesity will be around 6.3 pounds by 2015
• Local councils in England and Wales are spending thousands of pounds on obesity related services.
• Massive issue for public health.
• More tax is needed on investing money to encourage people to be active.
• Problems could be a lot from parents who make bad diet to their kids and lack of exercise.
• No one takes obesity serious threat to their health.
• 2/3 adults and 1/3 children are obesity in Uk
• By 2050, 9/10 adults and 2/3 children.

A) Economic argument for banning smoking in public places.
--> Why would it be not a good idea to smoke in public places. There are certainl many reasons for that. Firstly, if you smoke cigarettes in public places you will make those non-smokers around you to smell those smokes and also this second-hand smoking which is as harmful as first-hand smoking would might cause some kinds of sickness to those people. This issue not only makes them sick but also make their feelings disgusting because of the strong smell of tabacco. Furthermore, smoking in public places would stimulate young people to try them.

B) To what extent, do you think a 50 pound fine for being caught will reduce the market failure?
--> I think when smokers smoke 10 meters within the shops or any public places, then they should be fined 50 pounds. The reason for this extent is that because when people smoke in front of shops, the smell of tabacco stimulate those customers entering or exiting shops. So, it would be good idea to make this extent. This extent of smoking would be really good, since we can control those smokers away from the non-smokers.

Negative Externalities in China

a) Explain why the people falling sick is an example of Negative Externalities.
--> This issue is definitely an example of negative externalities. Because when people falling sick, it cost for them but also for others too. If the cost for themselves is smaller than cost for others, then it is negative externalities. In this article, we can see that the cost that the local government and the chemical company paying for those medical system is way more expensive than people paying for their own costs. So this is negative externalities.

• Government should reinforce the laws for those companies who sell milk or other daily drink related products to be more fresh and in a good condition.
• Government should reinforce the laws for those companies who make those kinds of huge pollutions which eventually effect the life of people.