Chapter 38 - Government policies to achieve efficient resource allocation and correct market failure Flashcards

1
Q

Interventions

A

1) Specific and Ad valorem tax
2) Subsidies
3) Regulations
4) Pollution Permits
5) Property Rights
6) Provision of information

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2
Q

Negative Production Externalities

A

1) Specific & AD valorem indirect taxes
2) Regulations
3) Property Rights Pollution permits
4) Property Rights
5) Pollution Permits

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3
Q

Regulations

A

A wide range of legal and other restrictions that come from government or regulatory bodies.

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4
Q

Property Rights

A

Where owners have a fight to decide how their assets may be used.

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5
Q

Pollution Permits

A

A form of license given by governments that allows a firm to pollute up to a given level.

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6
Q

Negative consumption externalities

A

1) Specific Indirect Taxes
2) Price Controls
3) Provision of information
4) Production Quotas

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7
Q

Provision Of Information

A

When governments directly provide information to correct market failure.

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8
Q

Production Quota

A

A physical limit on what can be produced.

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9
Q

Positive Production Externalities

A

Subsidies and provision of information.

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10
Q

Positive Consumption Externalities

A

Direct provision and subsidies

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11
Q

Nudge Theory

A

Influencing choice by ‘ nudging ‘ individuals towards making more effective decisions.

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12
Q

The role of government and issues of equality and Equity

A

Effective government intervention can produce not only a more efficient allocation of resources but can, by correcting marker failure, result in greater social equality and equity.

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13
Q

Nationalization

A

When a government takes over a private sector business and transfers it to state ownership.

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14
Q

Government Failure

A

Where government intervention to correct market failure leads to a net loss of economic welfare.

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15
Q

Causes and consequences of government failure

A
  • Imperfect information
  • Unintended Consequences
  • Policy Conflict
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