T8 - gov failiure

Question 1

What is gov fialiure

Answer 1

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

Question 2

Types of gov fialiure

Answer 2

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

Question 3

exampels of when gov should intervee

Answer 3

public and merit goods
dealing with inequality
monopsony and monopoly pwoer

Question 4

when should the gov intervene

Answer 4

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

Question 5

why should the gov not intervene

Answer 5

government failirue

Question 6

advaatges fo the free market and market forces

Answer 6

profit motive
competition
efficnecy
alloctaes scarce resources well
price mechansim functioning

Question 7

disadv of market forces

Answer 7

likely to cause all of PIMMFACED to some extent

Question 8

what does poor info mean for gov failiure

Answer 8

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

Question 9

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

Answer 9

susbside
regualtion
stae provsion
price control

Question 10

if gov cant enforce regualtio what will happen

Answer 10

peopel will go against themknwoign no punsihment

Question 11

unintended conssequnces of governemnt failiure

Answer 11

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

Question 12

exampel fo damages to the poor and shit for gov failiure

Answer 12

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

Question 13

how ay gov failiure be cuased by impacts on firms

Answer 13

lack of efficnecy
firms dependent
too high costs

Question 14

when coudl you argeu inflation as a gov failiure

Answer 14

rasising taxes
min prices

Question 15

when woudl unemployemtn be caused due to gov intevrention

Answer 15

any shit that causes costs to icnrease or demand to fall

Question 16

whats alwasy a good way to evalaute any policy

Answer 16

look at teh unintended consequences shit may cause

Question 17

examples of unintneded cosneuqnces

Answer 17

cost and inneficicy
inequality
black markets
macro conflict

Question 18

when does regualtory capture occur

Answer 18

when the ceos inetrest is taken into accoutn mroe than society

Question 19

lack of incentives meanign in gov failiure

Answer 19

where the intevrnetion doesnt incentiveise indivudals enough to change behavours

causes firms to become innefficint

Question 20

how does poor information lead to gov failiure

Answer 20

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

Question 21

how can moral hazard cause gov failiure

Answer 21

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

Question 22

examples of moral hazard causing ov failiure

Answer 22

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

Question 23

how does lack of cosnsiency and political oinetrference cause gov failiure

Answer 23

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

Question 24

examples of lack of cosntency causing gov failiure

Answer 24

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

Question 25

how can gov failiure be overcome

Answer 25

perofmance tagrets to create icnentives

publci private ownership

roles to non politcal bodies

Question 26

examples of incentivs that coudl eb put in place

Answer 26

performance requiremnets
non hourly pay sturctures
non monetary perks
improve working condtitons

Question 27

exampel fo a macro consequence emaning gov failiure

Answer 27

any that

reduce demand
rise prices
rises costs o fproduction

Question 28

gov failiure due to taxes

Answer 28

objective conflict
inequality
reduced lviing standards
black markets

Question 29

susbidise and gov failiure

Answer 29

inneficincy
complacent firms

Question 30

reagualtion adn gov failiure

Answer 30

inc costs and inefficny
macro conflict
regualtory capture
not being enforced

Question 31

information and gov failiure

Answer 31

not good enough
polic amkers dont knwo enough them self
undedcuated poeple

Question 32

max price and gov failiure

Answer 32

firms at a loss
decrease incentives
innefficncy

Question 33

min price adn gov failiure

Answer 33

innefficncy
inequality

Question 34

permits and gov failirue

Answer 34

higher cosst
monopoly just buying them
objectiev conflict
can cause inequality

Question 35

state aid provision and gov failiure

Answer 35

damag to bduegt defifcit
inefficciny and lack of incetives
poltical inetrfeences

Question 36

natiaonlsiation adn gov failiure

Answer 36

political interference
no incentives and efficney
burden on bydget
information failiure

Question 37

good way to evalaute gov itn methdos

Answer 37

just look at teh nagetaievs and fucking oevr exagerate them to uck adn link them to unitnended cosnequces

Question 38

hwo do high admin costs cause gov failiure

Answer 38

leads to lack of enforcement
leads to rising taxes
leads to less gov spending

Question 39

what is a dead weight loss area

Answer 39

the loss of consumer welfare and society due to market innefficency

Question 40

when is a dead weight lsos area created

Answer 40

when prices are rised

Question 41

what si teh deadweight loss area on the graoh

Answer 41

the traingle and diff between the the old quantity and new quantiy on a graph