1.4 - Government Intervention Flashcards
1
Q
what is a maximum price?
A
A legally imposed price for a good that suppliers cannot charge above
2
Q
what is a minimum price?
A
A legally imposed price for which suppliers cannot charge below
3
Q
what are tradeable pollution permits?
A
Permit allowing the owner to pollute up to a specific amount, which the government contols the maximum amout of pollution.
4
Q
what is government failure?
A
when government intervention in the market leads to net welfare loss and misallocation of resources
