So,I've read about stealth drinking. And there is answers on questions:
1. Explain how 'information failure' is a factor in 'market failure'.
I think this is in some way connected with negative externalities. When several years ago, for example wine contained 11% of alcohol, and nowadays it is 13% of alcohol in wine,so it's became stronger,and more harm to people's health...BUT, society do not know that there has been an increase in %-age of alcohol in wine, s
o it can be called 'information failure'..Producers put more alcohol in wine,more harm to people,but producers do not pay negative externalities "extra harm for people", so when they do not pay,it is called market failure..3. Is 'stealth drinking' an example of information failure - and if so, how is this the case?
I think in our case yes. because as I said above, stealth drinking "causes" a market failure.so in some way that "type" of drinking is leading to the market failure.
4. What action could the government take to deal with stealth drinking?
I might be thinking that there is many ways of government's actions,but I'll now try to introduce one of them: The
GOV. migth make the prices for strong alcohol drinks to rise, so people will less buy strong drinks, so less harm to society in whole. Or just raise taxes for producers,(who makes mostly strong drinks),therefore production of Strong drinks will be reduced..5. Read through the article again - are there any other examples of information failure there?
"The NHS recommends a limit of three to four units of alcohol per day for men, and two to three units for women. "- People in most cases just don't know that limits of taking alcohol.
The next phrase proves that: "It comes as latest figures show a third of men and a fifth of women drink more than the recommended daily limits. " Because people do not know about that limits of alcohol,it is also an information failure,I think...))))
IMPORTANT NOTICE: I'm not sure about the graph,is it right or not..So I'll be waiting for Chris's comment...
If it is not right, "Somebody" will again call me as : "Waste of the time,energy and space."....)))))
Graph is wrong - information failure is on consumption.
ReplyDeleteRead this:
http://www.tutor2u.net/economics/presentations/aseconomics/marketfailure/InformationFailures/default.html