Th1.4: Advantages of Provision of Information

Question 1

What are the two advantages of provision of information?

Answer 1

rationally

alongside other policies

Question 2

Rationally

Answer 2

helps consumers act rationally, allowing the market to work properly

Question 3

Alongside other policies

Answer 3

best if government uses this alongside other policies. e.g it can make demand more elastic in the long run and so help indirect taxes to become more efficient at reducing output

Question 4

Define provision of information mean

Answer 4

when there is asymmetric information, the government provides information to allow people to make informed decisions. they may also force companies to provide information