Questions in class today:
"Is a lack of access to clean drinking water a market failure?"
Response: Unequivocally, YES! Everyone has an guaranteed intrinsic demand for water, and the supply does not meet the demand. That is a market failure.
"How about smart phones?"
Response: YES! We live in a knowledge society and all of our macro level concepts --rationality, meritocracy, utility, justice, etc.,-- hinge upon our ability to access and process information. Some might argue that ignorance is bliss, but those who are ignorant also are not reaching their potential. (Also, see "The Three I's" in Banerjee, A. and Duflo, E. book Poor Economics). Simply put though, there is an astronomically large unmet demand for greater access to information (Digital Divide), and the supply (smart phones) does not match the demand. MARKET FAIL!
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