Chapter 18- govt. intervention and failure

Question 1

mixed economies

Answer 1

have a private sector and public sector.

Question 2

government failure

Answer 2

occurs when public sector activity or govt. intervention , intended to correct a market failure, makes the situation worse rather than better.

Question 3

regulation

Answer 3

means applying rules to businesses and other organisations.

Question 4

subsidy

Answer 4

is a payment per unit sold which effectively shifts a supply curve downwards. usually the price falls and the quantity increases.