Micro Intervention Flashcards
1
Q
ad valorem tax
A
tax that is based on a set percentage of the value or price of a product
2
Q
regulation
A
command and control approach to regulation involving using legal restrictions and consequences to change the behaviour of firms and households
3
Q
property rights
A
owners have the right to decide how their assets may be used
4
Q
pollution permit
A
form of licence given by governments that allow firms to pollute up to a given level
5
Q
production quota
A
physical limit on what can be produced
6
Q
nudge theory
A
influencing choice by ‘nudging’ individuals towards making more effective/rational decisions
7
Q
government failure
A
costs outweigh the benefits of govt intervention to correct market failure, leading to a new market failure and net loss of economic welfare
