1. Explain the meaning of allocative and productive efficiency. Why do economists argue that competitive markets are best suited to achieve overall efficiency from a societal viewpoint?

2. Review the role that government policy plays in regulating markets and protecting consumers. In your opinion, why is knowledge of these issues important for decision-making in business? 

3. You are having a discussion with a friend, who says:

'Markets often mess up. For instance, businesses have little incentive to make their customers pay for the pollution they create, and society at-large has to shoulder that burden. Also, I dread the time when governments stop subsidising tertiary education and leave University fees at the mercy of the private sector.'

Analyse this statement by discussing the role of government in regards to market externalities

4. Do you think the government can, and even should, leave the private sector to provide all society's needs for goods and services? Justify your answer.