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How do market prices coordinate the economic activity of millions of individuals? 2. What is a negative externality? 3. How does an externality indicate market failure? 4. How does market power or monopoly subvert the coordinating function of market prices? 5. What is the tragedy of the commons? What are some of the ways in which capital exercises influence the State? 2. Using a historical instance as an example, explain how the State helped to create the conditions for capitalist competition. 3. How does the welfare state help stabilize the capitalist system? 4. How did the rise of labour unions change the working conditions of labour? 5. What were the broad differences in the balance of power between capital and labour in the US and Canada in the 1930s and in the 1980s?