Government microeconomic intervention (A level) Flashcards
Regulations
a wide range of legal and other restrictions that come from government or regulatory bodies
Property rights
where owners have a right to decide how their assets may be used
Pollution permit
a form of license given by governments that allows a firm to pollute up to a given level
Provision of information
when governments directly provide information to correct market failure
Production Quota
a physical limit on what can be produced
“Nudge” theory
influencing choice by “nudging” individuals towards making more effective decisions
Nationalisation
when government takes over a private sector business and transfers it to state ownership
Government failure
where government intervention to correct market failure leads to a net loss of economic welfare
Equality
where everyone is treated i the same way
Extreme poverty
where a household exists on less than $1.90 a day
Relative poverty
where households income is 50% or less than the average income
Means-tested benefits
benefits that are paid only to those whose incomes fall below a certain level
Poverty trap
where an individual or a family are better off on means-tested benefits rather than working
Universal benefits
benefits available to all irrespective of income or wealth
Universal basic income
a regular unconditional cash payment made by the government
Negative income tax
money paid out by the government to those earning below an agreed annual fixed benefit limit
Marginal revenue product
the addition to total revenue as a result of employing one more worker
Trade union
an organisation of workers that aims to protect and enhance the well-being of its members through collective negotiations with employers and government
Monopsony
where there is a single buyer in a market
Wage differential
difference in pay between workers with different skills and responsibilities
Transfer earnings
the amount that is earned by a factor of productions in its best alternative use
Economic rent
a payment made to a factor of production above that which is necessary to keep it in its current use
