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Jacob: Im Jacob Clifford Adriene: and Im Adriene Hill and welcome to Crash Course Economics. Jacob: In the last few videos weve said a lot of nice things about how competitive markets allocate resources. You know, they do a pretty good job. Adriene: But nobodys perfect. Sometimes markets get it wrong. Sometimes they fail. Sometimes the byproducts of production make people sick. Today we are going to talk about those market failures, and how economists address them. [Theme Music] In 2105, a story made the rounds online about a University of Maryland professor and an extra credit question: Select whether you want 2 points or 6 points added onto your final paper grade. But theres a small catchif more than 10% of the class selects 6 points, then no one gets any points. So, what would you do? The question alludes to one of the biggest problems with free markets: sometimes people have a personal incentive to do something that is against the collective interests of the group. Obvio
