T8 _ publcie ownership

Question 1

What is a command economy

Answer 1

Government owned
Gov regulation on MF

Question 1

What si a market economy

Answer 1

Owned by private sector
freedom to start business
supply and demand choose price

Question 2

Benefits of privatisation

Answer 2

comp and efficency
lack of political interference
helps gov budget
long term growth

Question 3

Negatievs of privatisation

Answer 3

Cause monopoly
hard to regulate monoply
loss of consumer welfare
high costs

Question 4

Evalutation of privatisation

Answer 4

Type of good
Depends on quality of regualtion
Type of industry and market created
Incentives for nat firms?

Question 5

What is regualtion

Answer 5

Set of rules imposed by the governemnt to determien behaviours of rims

Question 6

Why may gov use regualtion

Answer 6

Externalities
Monopoly power
Consumer welfare
Competition
Info
Labour markets

Question 7

Disadvantages of regaltuom

Answer 7

cost on firms
inc bte
dec comp
affects descion making

Question 8

What is deregualtin

Answer 8

Removal of legislation, removign barreirs to entry

Question 9

Adv of dergeulation

Answer 9

Inc comp
Greater efficency
Greater consumer chocies
Inc contestbability

Question 10

Dis adv of de reg

Answer 10

Difficult to create comp in a a market where there is monopoly power
Duplication of sercies
Firms may cherry pick most profitabe serveices
Poorer provision of public goods
No guarnettee firms will keep standards high

Question 11

Whta is regaulatory capture

Answer 11

Where govbecomes sypatheti to buesiness they regualte

Question 12

How does regualtory capture occur

Answer 12

Regualtors become friendly with firms
Lack of regualtors workers
Firms pushing for reg to damage comp
Info failiure
Politcal interference

Question 13

who owns privatsied firms

Answer 13

private sector

Question 14

what is the inceintive in privatised firms

Answer 14

profit

Question 15

will natioanlised firms ignore social cost and ebenif

Answer 15

no, but privatised will

Question 16

will privatised firms put profit above social benefit

Answer 16

yes, nationalised wont

Question 17

will natioanlised firms be as efficient as rpiatised firms

Answer 17

no, lack of comp, natural monoply, no need to be

Question 18

under whic wndership will a firm be lead be experts

Answer 18

privatisied

Question 19

what do nationalised firms set price on

Answer 19

social factors, costs and beenfits

Question 20

what do priavtised firms set prices based on

Answer 20

maximsing profit

Question 21

positive of nationalisation

Answer 21

greater eco of scale
inc consumer welfare
less likely market failiure
better macro economic control

Question 22

arguments against natioanlsiation

Answer 22

lack of incentives
inneficincy
damages budget deficit
political interference and moral hazard

Question 23

eval of natioanlisation

Answer 23

Public private ownership?
Better regulation instead
Pros of comp outweigh pros of nat
size and objectives of firms to be natioanlised

Question 24

what si mroal hazard

Answer 24

indivudals bearingtaking risk as tehy knwo a third party will pay teh cost

Question 25

example of moral hazard in nationalisation

Answer 25

gov fuckings hit up knwoing tax payer will bear teh cost

Question 26

will regualtors be innefcient

Answer 26

yes if -

decreases comp
regualtory capture
not properly enforced

Question 27

adv of regualtion

Answer 27

curb externalities
protect consumers
less discrimination
fairer
leads to innovation