Gov Intervebtion Policies

Question 1

Max price /pure ceiling def

Answer 1

A fixed pric enacted by the Giv. Usually blow equilibrium

Question 2

Pros of max price

Answer 2

Consume high surplus. Fixes market faliure Reduce inequality

Question 3

Cons of max price

Answer 3

Or Marion of black markets shorter wits , unregulated (dangerous) loss of tax rev
Produces lose rev

Question 4

Pros of subsidy

Answer 4

Increased cons surplus
Producer huge rev
Reduce inequalities
Acheive aims of gov

Question 5

Cons of subsidy

Answer 5

Cons are burden tax rises
Huge opportunity cost
Leads to dependency
How is it spent

Question 6

Effect on tax on upply

Answer 6

Cons pay more. Less choice. Regressive policy
Producer or workers - lower rev and surplus. Workers job at risk. May shut down leave country or form black markets

Question 7

Eg of subsidy in uk

Answer 7

100m Tesla
Tax cuts to r and d

Question 8

Min price pros

Answer 8

Producers. Depends on industry eg agricultur benefit as farmer income I potected
Milk
Sugar

Question 9

Cons o min price

Answer 9

Consumer - highe prices less surplus less quantuty highe taxes regressive
Gov - back market. Excess supply