Information Provision

Question 1

What is information provision?

Answer 1

• ᴛʜᴇ ɢᴏᴠᴇʀɴᴍᴇɴᴛ ᴘʀᴏᴠɪᴅᴇꜱ ɪɴꜰᴏʀᴍᴀᴛɪᴏɴ ᴛᴏ ᴇɴᴄᴏᴜʀᴀɢᴇ ᴘᴇᴏᴘʟᴇ ᴀɴᴅ ᴏʀɢᴀɴɪꜱᴀᴛɪᴏɴꜱ ᴛᴏ ᴄʜᴀɴɢᴇ ᴛʜᴇɪʀ ʙᴇʜᴀᴠɪᴏᴜʀ. *:
• educate public about harmful effects of demerit goods which causes demand to fall
• encourage goods with positive externalities which aim to change consumer preferences

Question 2

What are the costs of this?

Answer 2

• hard to judge how effective it is
• consumers may ignore if they are addicted
• maybe less effective than other measures
• consumers may not take notice

Question 3

What are the benefits?

Answer 3

-cheaper than other methods

so has a lower oppurtunity cost