Question

1. Briefly comment that "Food policy interventions at micro, meso, and macro levels should be complementary to each other".

2. Explain the most common examples of market failure

Answer 1

1.

Food policy interventions ensure that people in the economy or concerned geographical location, get sufficient food for consumption, develop healthy eating practices and producers produce food and of type that is intended in the policy. It helps a country to be self sufficient and capable to feed its own requirements in healthy ways. The policy intervention should be complement at micro, meso and macro level, so that policy will have synergy effect and objectives will be achieved with ease. For example, a food policy intervention, at macro level, has to focus upon national level policy that has to cover everyone in the country. The policy takes a modified form, when it is at a community or state level. Here, the state level government can bring its own inputs to make it more successful. The third level is micro or family level, where the local government helps to deliver the benefit and message to the individuals. Here, each level works in the same direction so that policy becomes successful even if states and families vary in their needs. But, at appropriate level, the modification takes place to make policy relevant and complement at each level.

2.

There are different examples of market failure. The first example is in the public goods when free rider problem occurs. For example, people dumping waste in the lake that is available to everyone for use, is destroying the lake. It takes loss of the public good and market failure takes place. The second case of firms emitting pollution and  creating negative externality is the example of market failure. Here, people get products at lower price since MPC is lower than the MSC and producers benefit out of it at the expense of society. The third case of market failure is adverse selection. Here, individuals hide the information and or take risky action so that other pay for that. It happens in insurance or selling of secondhand products. It creates market failure.