government failure

Question 1

Government failure is…

Answer 1

when the costs of intervention outweigh the benefits of intervention.
the end result is a worsening of the allocation of scarce reasources, harming social welfare

Question 2

information failure

Answer 2

• polititions can lack information needed to make effective policy decisions especially when evaluating externaliting
• f they base policies on wrong or incomplete data, their interventions can end up being ineffective or harmful.

Question 3

administrative and Enforcement Costs:

Answer 3

The cost of implementing and enforcing government policies can be very high.

Sometimes, the resources spent on trying to fix a problem (like hiring regulators or monitoring compliance) outweigh the benefits, making the intervention inefficient