After spending $400,000 to build your dream home, you recently discovered that after less than one year the foundation is cracking. Further investigation reveals that the contractor used substandard concrete. Is there a role for the public sector in this situation?

There would certainly appear to be since this would come under the source of market failure known as "poor information." First, the public sector has established standards for foundation concrete. Since you discovered these violations after the house was built, the public sector offers laws and a court system for you to recover your losses. Also, if this contractor habitually engages in such activities, the public sector has the power to put him out of business, to protect potential future dream home owners.