government failure

Question 1

definition of government failure and the end result

Answer 1

when the costs of intervention outweigh its benefits
could lead to a further worsening of allocation of scarce resources harming social welfare

Question 2

types of government failure

Answer 2

-info failure: valuing externalities
-admin and enforcement costs high: regulation, subsidies, state prov, price control
-unintended consequences:black markets, impact of poor/firms/employment
-regulatory capture: regulating monopoly power