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Title / Investigate market failure and evaluate corrective mechanisms
Level / 5 / Credits / 2
Purpose / People credited with this unit standard are able to: describe the causes and analyse the consequences of, and evaluate mechanisms which aim to correct, market failure.
Classification / Economic Theory and Practice > Micro Economics
Available grade / Achieved
Explanatory notes
1 Coasian bargaining suggests that externality generated market failure can be corrected by a process of free bargaining between the parties involved, without the need for government intervention. Coase, Ronald H. 'The Problem of Social Cost' (1960) vol 3, no 1, Journal of Law and Economics, 1-44.
2 Legislation relevant to this unit standard includes but is not limited to:
Resource Management Act 1991.
Outcomes and evidence requirements
Outcome 1
Describe the causes and analyse the consequences of market failure.
Evidence requirements
1.1 The description establishes situations which lead to market failure.
Range situations of market failure may include but are not limited to – three of – externalities (positive and negative), public goods, resource depletion, imperfect competition.
1.2 The analysis establishes the consequences of market failure.
Range consequences may include but are not limited to – two of – changes to price and output, allocative inefficiency, resource depletion, free riders.
Outcome 2
Evaluate mechanisms which aim to correct market failure.
Evidence requirements
2.1 The evaluation identifies mechanisms to correct market failure in terms of their effectiveness and practical application.
Range mechanism – two of – Coasian bargaining; environmental controls; subsidy; tax; Resource Management Act 1991; international protocols, treaties, and conventions.
Planned review date / 31 December 2019Status information and last date for assessment for superseded versions
Process / Version / Date / Last Date for Assessment /Registration / 1 / 29 October 1996 / 31 December 2016
Revision / 2 / 21 July 1999 / 31 December 2016
Revision / 3 / 14 September 2005 / 31 December 2016
Review / 4 / 16 October 2009 / 31 December 2016
Rollover and Revision / 5 / 16 April 2015 / N/A
Consent and Moderation Requirements (CMR) reference / 0116
This CMR can be accessed at http://www.nzqa.govt.nz/framework/search/index.do.
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Providers and Industry Training Organisations, which have been granted consent and which are assessing against unit standards must engage with the moderation system that applies to those standards.
Requirements for consent to assess and an outline of the moderation system that applies to this standard are outlined in the Consent and Moderation Requirements (CMR). The CMR also includes useful information about special requirements for organisations wishing to develop education and training programmes, such as minimum qualifications for tutors and assessors, and special resource requirements.
Comments on this unit standard
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NZQA National Qualifications ServicesSSB Code 130301 / Ó New Zealand Qualifications Authority 2015