5.9 Micro Flashcards
1
Q
How does government failure occur?
A
When government intervention leads to a misallocation of resources
2
Q
What are the reasons for government failure?
A
Inadequate information Unintended consequences Market distortions Administrative costs Regulatory capture
3
Q
What is inadequate information?
A
Provision of information ensures that economic units can maximise decisions when consuming and producing goods and services
4
Q
Where does the government provide information?
A
The job market
Dangerous products
Economic data
5
Q
What can go wrong when governments try to provide information?
A
Send the wrong signals, leading to market failure and poor decision making
6
Q
What are administrative costs?
A
The expenditure on intervention
