1. On March 2018, the consumption of "two polony brands manufactured by Enterprise and Rainbow Chicken Limited" was attributed to listeriosis infection of nine children.
2. Sugar cane farmers in the Kwa-Zulu Natal South Coast are unable to take advantage of the growing demand for macadamia nuts due to in part, "Macadamia requires large initial capital to establish (first 7 year operational costs) and to see the orchard through to maturity".
3. The Durban South Basin has been named as one of the hotspots for high air pollution levels in South Africa.
4. South Africa's parliament passed a minimum wage bill by a large majority, meaning that millions of workers will now earn R20 per hour. This is equivalent to R3,500 per month.
5. The living Conditions Survey 2014/15 found that the country had a Gini coefficient of 0.63 in 2015, the highest in the world.
Discuss the types of market failure inherent in the above statements. In your discussion, suggest ways that government can intervene for each or possibly how governments in certain countries have intervened in order to correct the types of market failures outlined above.
Answer) The following are the types of market failure inherent in the above statements.
1. Productive and allocative inefficiency, it refers to the inefficiency of availabe scare resources and production function.
2. Monopoly power, it refers to that due to large initial capital investment, it provide advantages to the highly accumulated capital owners.
3. Negative Externalities, it refers to the interption of social reform for the environmental benifit.
4. in this case, minimum wage will act as a remedies for to reduce market failure which come under the legislation and force category.
5. Inequality, it refer to the unequal distribution of income among the people of economy. In brief their is presence of gap between earning level of people residing in that economy.
Ways that government can intervene
The following are the two broad ways by which government can intervene
1. Use of the price machnisim, it is basially use to correct the price difference in economy. Take an example of oil crises.
2. As disscussed above use of legislation and force: it refers to the power that government have to accomplish the above purpose, As government can able to force or use legislation by making needful changes in the law So, the economic socio development will take place.
1. On March 2018, the consumption of "two polony brands manufactured by Enterprise and Rainbow Chicken...