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Table of Contents

  1. Topic pack - Microeconomics - introduction
  2. 1.1 Competitive Markets: Demand and Supply
  3. 1.1 Competitive Markets: Demand and Supply - notes
  4. 1.1 Competitive markets - questions
  5. 1.1 Competitive markets - simulations and activities
  6. 1.2 Elasticities
  7. 1.2 Elasticities - notes
  8. Section 1.2 Elasticities - questions
  9. Section 1.2 Elasticities - simulations and activities
  10. 1.3 Government intervention
  11. 1.3 Government Intervention - notes
  12. 1.3 Government intervention - questions
  13. 1.3 Government intervention - simulations and activities
  14. 1.4 Market failure
  15. 1.4 Market failure - notes
    1. The meaning of externalities
    2. Types of externalities
    3. How do externalities affect allocative efficiency?
    4. Negative externalities of production
    5. Negative externalities of consumption
    6. The economic theory of traffic congestion
    7. Demerit goods
    8. Government responses - demerit goods
    9. Possible government responses to externalities
    10. Direct government provision
    11. Extension of property rights
    12. Taxes and subsidies
    13. Tradeable pollution rights
    14. Regulation, legislation and direct controls
    15. Positive externalities of production
    16. Positive externalities of consumption
    17. Merit goods
    18. Why might merit goods be underprovided by the market?
    19. Government responses - merit goods
    20. Public goods
    21. Common access resources & sustainability
    22. The tragedy of the Commons
    23. Common access resources in practice
    24. Sustainability
    25. Threats to Sustainability
    26. The threat to sustainability from the use of fossil fuels
    27. The threat to sustainability from poverty
    28. Government responses to threats to sustainability
    29. Cap and Trade Schemes
    30. Promoting Clean Technologies
    31. The 'dirty side' of cleaner technologies
    32. International responses to threats to sustainability
    33. Asymmetric information
    34. Abuse of monopoly power
    35. Inequality
  16. Section 1.4 Market failure - questions
  17. Section 1.4 Market failure - simulations and activities
  18. 1.5 Theory of the firm
  19. 1.5 Theory of the firm - notes (HL only)
  20. Section 1.5 Theory of the firm - questions
  21. Section 1.5 Theory of the firm - simulations and activities
  22. Print View


A universally accepted definition of sustainability remains elusive, because they focus on the many contexts in which the term is used. Most relevant to the study of market failure are those definitions that relate to natural resources and their usage: Specifically Common Access Resources.

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Sustainability and sustainable development

Sustainability encompasses the simple principle of taking from the earth only what it can provide indefinitely, thus leaving future generations no less than we have access to ourselves.

Friends of the Earth, Scotland

Sustainability may be described as our responsibility to proceed in a way that will sustain life and allow our children, grandchildren and great-grandchildren to live comfortably in a friendly, clean, and healthy world.

Thomas Jefferson Sustainability Council

Sustainable Development is positive change which does not undermine the environmental or social systems on which we depend. It requires a coordinated approach to planning and policy making that involves public participation. Its success depends on widespread understanding of the critical relationship between people and their environment and the will to make necessary changes.


All these definitions concern the need for humans to:

  • live within the limits of the Earth's resources
  • examine the distribution of resources and opportunities
  • meet the needs of the present without compromising the ability of future generations to meet their needs

Sustainable development was defined at the 2005 World Summit as development requiring an understanding and reconciliation of the 'three pillars' of sustainability, that of environmental, social and economic demands.

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The Millennium Development Goals (MDGs) are international development goals that all 193 United Nations member states agreed to achieve by the year 2015 following the Millennium Summit in 2000. There are eight goals with 21 targets. Goal 7 is to ensure environmental sustainability with the target of integrating the principles of sustainable development into country policies and programmes to reverse the loss of environmental resources. Each year the United Nations reports on progress towards achieving the MDGs. The following articles provide details on achievements and failures to meet the MDGs and, in particular, progress towards environmental sustainability.