Major Field of Study Subject Subject in Charge Economic Theory Studies in Microeconomic Theory Osamu Keida This subject forms the economic basis for other applied economics. In order to understand the economy, one must understand the "market." In this lecture, we will discuss the "quality" of the market, which refers to the quality of competition within the market. First, we will briefly check the behavior of consumers and producers, and then investigate a quality market. We will learn that a "quality" market is optimal, i.e. it has optimal resource allocation. Next, we will deal with failure of market and government, and imperfect competition characterized by problematic resource allocation. We will examine government taxing and quotas and how they lead to government failure. We will explore the concepts of public goods, externality, and imperfect competition, and how they are related to market failure. We will further learn why markets and governments fail, and preventative measures that are effective in avoiding failure.