A. Even if someone were rich enough to pay for such security
B. If everyone waited for a free ride
C. The government makes no attempt to intervene.
D. Some people would welcome unregulated roadways as a new utopia
E. the use of the market mechanism does not imply a free market.
F. They would want the government to intervene
G. National defense is an example
H. the market might produce too much of a good or service
Market Failure
The market does not work equally well in all situations. In fact, in some circumstances, the market mechanism might actually fail to produce the goods and services society desires.
(9) Most people want to feel that their nation’s borders are secure and that law and order will prevail in their communities. But few people can afford to buy an army or maintain a le gal system. (10) he or she might decline to do so. After all, a military force and a legal sys tem would benefit everyone in the community, not just those individuals who paid for it.
Recognizing this, few people would willingly pay for national security or a system of criminal justice. They would rather spend their income on ice cream and DVD players, hoping some one else would pay for law and order. (11) no money would be spent on national defense or a legal system. Society would end up with neither output, even though both services were widely desired.
In other situations, (12) If there were no government regulation, then anyone who had enough money could purchase and drive a car. Little kids from wealthy families could hit the highways, and so could adults with a history of drunken driving. Moreover, no one would have to spend money on emissions-control systems, lead free gasoline, or mufflers. We could drive as fast as we wanted.
(13) Others, however, would be concerned about safety and pollution. They would realize that the market’s decisions about who could drive and what kinds of cars were produced might not be so perfect. (14) To assure safer and cleaner driving, people might agree to let the government regulate speed, auto emissions, and even drivers.
