Government Intervention Case studies

Question 1

Direct Provision

Answer 1

COVID vaccine - Costs government 15 pounds for Pfiser vaccine (government did fund local vaccine)

Bad example: ireland direct provision for asylum seekers. very bad living conditions and participants don’t have any rights in country

Question 2

Purgovian tax

Answer 2

SA alcohol tax - 23% tax on beer (inelastic demand because of addictive good)

Question 3

Subsidy

Answer 3

south africa school meal subsidy (reached 9 million children 2013) also includes education on nutrition.

Demand for nutritional food would be low because of the high prices and undereducation for low income south africans. Will help with their school performance and health in long term (benefit)

Question 4

Regulation

Answer 4

France has passed a law to ensure plastic cups, cutlery and plates need to be composed of biodegradable materials.

Affects on other substitute companies, and effectiveness.

Question 5

Education

Answer 5

American nutrition labeling and education act, requires foods to show nutrition labels and calories. According to American Journal of Preventive Medicine (AJPM) food labels decrease caloric intake by 6.6% and increase vegetable consumption by 13.5% on average.

Question 6

Negative advertising

Answer 6

UK 2012 cigarette negative advertising by the government, showing graphic images of polluted blood. resulted in 50% more quit attempts compared to previous years.

Question 7

Price ceiling

Answer 7

USA 1970s gasoline price ceiling at $1.00 per gallon, market $1.20 per gallon. (supply shcoks)
Cause shortage -> non price rationing (only certain license plates were allowed to refill on certain days) -> concluded public worse off

Question 8

Price floor

Answer 8

Scotland alcohol 2018 price floor at 50 pence per unit of alcohol (8 grams). Previous price was 18 pence. Alcohol costs scotland more than 3.6 billion pounds a year in healthcare.

Question 9

Direct provision example 2

Answer 9

MOSE project - A series of automated water gates to protect the venetian lagoon and areas from flooding from the ocean (venice most popular city)- (Common Access Resource) cost $8.8B (for 3 installments). Massive postivie externality to all who live in that area when construction is finished