Micro: Government Intervention Flashcards
What can the free market result in
The free market can result in a misallocation of resources
What does the UK government having a nudge unit implie
The UK government has a Nudge unit, which implies that consumers may not be rational agents and need guidance
Why do Governments want to consume things like Education
Governments may want people to consume more things like education, which have positive externalities.
How might subsidies or free state provision be used
Subsidies or free state provision may be used to encourage the consumption of merit goods
What does a consumers ability to consume goods and services depend on in a market based economy
In a market-based economy, a consumer’s ability to consume goods and services depends on their income and wealth
What may consumers on low incomes not be able to afford
If a consumer has a low income, they may not be able to afford basic goods to satisfy their needs
