ECN10  

Name ___________________________ Class _____________________ Date __________

CHAPTER
3
SECTION 3

STUDENT ACTIVITY
Market Failures and Externalities

3

Work with your team to fill in the table below. For each public good or service,
describe the reasons that the free market might have trouble producing that good or
service efficiently (market failure), any positive externalities it produces, any negative
externalities it produces, and what the government can do to limit any negative
externalities.

How government

Public good
or service

Interstate
highways

Public libraries

Street lights

National
defense and
the military

Flood control
projects

Market failure

Positive
externalities

Negative
externalities

can limit negative
externalities

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