Appropriate policy analysis requires one to analyze when markets fail and when government fails to generate socially desirable outcomes. A. Briefly describe what is meant by market failure and by government failure. B. Briefly describe what Demsetz (1969) meant by the “nirvana approach” and the “comparative institutional” approach to public policy analysis. Why do we frequently use the nirvana approach as a starting point when discussing the merits of an economic policy? C. In general, do you think it would be socially more costly to undo a government policy that places too many restrictions on a market than a policy that places too few? Explain.