RWK- Micro Flashcards
Water Scarcity in India
Water shortages affecting households and farmers
Water price increased due to high demand from population growth and drought
Extremely high water stress
Other countries e.g Saudi Arabia and South Africa as well
Example of decrease in demand
Print newspaper had experienced a decrease in demand due to cheap substitutes online and accessing news through social media
Example of increase in demand
Electric cars due to rising fuel prices increasing the price of substitute
Example of increase in supply
VAT tax cut for UK hospitality industry to 5% in 2021
-encourage greater supply and lower prices- restaurants
Example of decrease in supply
Subsidising home solar panels
Bad weather in summer and winter- decreased harvest of tomatoes, olives and peppers- increased prices for EU
Example of indirect tax
Fuel duty in France
Increase fuel duty to increase government revenue and against climate change- reducing fuel emissions
But led to decrease in standards of living
Example of subsidies
Vaccination in HK
Subsidies for influenza vaccination for children, pensioners, disabled
Protecting the most vulnerable- could reduce spread
Minimum price
Cocoa In Ivory Coast and Ghana
60% of global cocoa bean supply
Directly impact the income of producers- protect farmers from global fall in price
Minimum farm price increased by 11% to $1.62/kg
Maximum Price
Basic food items in Venezuela
Improve affordability for daily needs
Led to huge shortages, shops often left empty
Large black markets- smuggled goods from abroad and sold to desperate consumers
Due to excess demand
Negative externality of production
Air pollution - £43million annual healthcare cost
Positive externality of consumption
Vaccination and healthcare- reduce spread of disease benefitting wider society
Education- higher incomes and increase tax revenue collected
Public Good
Flood Defences
Still lack of coverages in many areas due to lack of government finance
Tragedy of the commons
Forests in Malaysia
Fastest deforestation rate in the world
15% of its forest coverage lost since 2000
Using indirect tax to correct market failure
UK Sugar tax
Sugar tax on fizzy drinks
50% companies change recipes so that sugar volume below tax threshold
10% reduction in sugar consumption from fizzy drinks
However, general consumption of sugar had increased since sugar tax introduced
Regressive tax
Range of tax, only on fizzy drinks
Subsidies to solve market failure
UK COVID-19 vaccines- £88 million used to support development of vaccines- and all doses are free
Regulation to solve market failure
Germany
Imposed a deposit recycling scheme
Consumers pay extra when buying item with recyclable packaging
Only get deposit back after recycling them
Beijing
Road Space Rationing
To reduce pollution levels
Odd-even license plate policy- cars only allowed on the road on the day depending on their license plate ended in odd or even
Heavy vehicle emitters are labelled with yellow sticker banning them from certain roads
Need to enter a monthly lottery draw in order to purchase a second car
Decreased pollution by 40%
State provision to correct market failure
NHS
No one should be denied access to healthcare- should be non-excludable
NHS deal with the underprovision
However, excess demand put pressure on the system- waitlists and delayed surgery
X-inefficiency due to not profit motived
