1.4.1 Government Intervention

Question 1

What is non rivalry in a public good

Answer 1

Consumption by one person does not reduce the supply for others, usually provided by the state
e.g street lights, parks

Question 1

What is non excludability in a public good?

Answer 1

The benefits derives from them can’t be confined solely to those who have paid for it, leads to the free rider problem

Question 2

WHat is an excludable private good?

Answer 2

Sellers can easily prevent people who have not paid from the good from consuming it

Question 3

What is a quasi public good?

Answer 3

A near public good

Question 4

Give examples of government intervention

Answer 4

Indirect taxation, subsidies, maximum and minimum prices, trade pollution permits, state provision of public goods, regulations

Question 5

What is maximum price?

Answer 5

A ceiling price that suppliers can’t exceed

Question 6

What is minimum price?

Answer 6

Legally imposed price floors