T8 - gov failiure Flashcards

1
Q

What is gov fialiure

A

Wehn gov intevrention leads to a recution in eco welfare, leadign to allocation of resoruces whcih si worse than the free market outcome

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2
Q

Types of gov fialiure

A

Lack of incetnives
Porr info
Political inetrference
No consitencu
Moral hazard
regualtory capture
Unintteneded consequences

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3
Q

exampels of when gov should intervee

A

public and merit goods
dealing with inequality
monopsony and monopoly pwoer

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4
Q

when should the gov intervene

A

on things that will benefit society or where market forces wont be strong enough to deal with the issue

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5
Q

why should the gov not intervene

A

government failirue

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6
Q

advaatges fo the free market and market forces

A

profit motive
competition
efficnecy
alloctaes scarce resources well
price mechansim functioning

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7
Q

disadv of market forces

A

likely to cause all of PIMMFACED to some extent

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8
Q

what does poor info mean for gov failiure

A

policy makers may not hae fully inforamtion, especsially when valuing externalitites

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9
Q

wehn are high costs of gov int likely to be an issue

A

susbside
regualtion
stae provsion
price control

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10
Q

if gov cant enforce regualtio what will happen

A

peopel will go against themknwoign no punsihment

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11
Q

unintended conssequnces of governemnt failiure

A

black markets
innefficency of firms
ineuqality (regressive shit)
macro conflict

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12
Q

exampel fo damages to the poor and shit for gov failiure

A

when regressive shit si in palce and say min prices, emanign they cant afford, hence increasign inequality

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13
Q

how ay gov failiure be cuased by impacts on firms

A

lack of efficnecy
firms dependent
too high costs

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14
Q

when coudl you argeu inflation as a gov failiure

A

rasising taxes
min prices

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15
Q

when woudl unemployemtn be caused due to gov intevrention

A

any shit that causes costs to icnrease or demand to fall

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16
Q

whats alwasy a good way to evalaute any policy

A

look at teh unintended consequences shit may cause

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17
Q

examples of unintneded cosneuqnces

A

cost and inneficicy
inequality
black markets
macro conflict

18
Q

when does regualtory capture occur

A

when the ceos inetrest is taken into accoutn mroe than society

19
Q

lack of incentives meanign in gov failiure

A

where the intevrnetion doesnt incentiveise indivudals enough to change behavours

causes firms to become innefficint

20
Q

how does poor information lead to gov failiure

A

policy makers dont knwo enough about the idnrusty, for exampel say taxes on a monopoly btu the good is inelastic, few susbtutues, elading to just higher prices anyway

21
Q

how can moral hazard cause gov failiure

A

as idnivudals may take greater risks kwnoing the gov will look after tehm and bear teh costs

22
Q

examples of moral hazard causing ov failiure

A

when banks take risks as they know they can get bailed out by gov

23
Q

how does lack of cosnsiency and political oinetrference cause gov failiure

A

only short term beenfits cosnidered for the next election and parites may change

24
Q

examples of lack of cosntency causing gov failiure

A

say EU, the idea was done for policial votes and shit, but now causing mroe expensive improts damaging society etc

25
how can gov failiure be overcome
perofmance tagrets to create icnentives publci private ownership roles to non politcal bodies
26
examples of incentivs that coudl eb put in place
performance requiremnets non hourly pay sturctures non monetary perks improve working condtitons
27
exampel fo a macro consequence emaning gov failiure
any that reduce demand rise prices rises costs o fproduction
28
gov failiure due to taxes
objective conflict inequality reduced lviing standards black markets
29
susbidise and gov failiure
inneficincy complacent firms
30
reagualtion adn gov failiure
inc costs and inefficny macro conflict regualtory capture not being enforced
31
information and gov failiure
not good enough polic amkers dont knwo enough them self undedcuated poeple
32
max price and gov failiure
firms at a loss decrease incentives innefficncy
33
min price adn gov failiure
innefficncy inequality
34
permits and gov failirue
higher cosst monopoly just buying them objectiev conflict can cause inequality
35
state aid provision and gov failiure
damag to bduegt defifcit inefficciny and lack of incetives poltical inetrfeences
36
natiaonlsiation adn gov failiure
political interference no incentives and efficney burden on bydget information failiure
37
good way to evalaute gov itn methdos
just look at teh nagetaievs and fucking oevr exagerate them to uck adn link them to unitnended cosnequces
38
hwo do high admin costs cause gov failiure
leads to lack of enforcement leads to rising taxes leads to less gov spending
39
what is a dead weight loss area
the loss of consumer welfare and society due to market innefficency
40
when is a dead weight lsos area created
when prices are rised
41
what si teh deadweight loss area on the graoh
the traingle and diff between the the old quantity and new quantiy on a graph