Government Failure

Question 1

Causes of government failure

Answer 1

Inadequate information
Conflicting objectives
Administrative costs

Question 2

Example of government failure by inadequate information

Answer 2

Gov encouraging high consumption of dairy products as medical information showed it was healthy

Question 3

Government failure due to conflicting objectives

Answer 3

Conflict between achieves higher outputs or greater equality

Question 4

Government failure due to administrative costs

Answer 4

If gov intervention provides welfare benefits that are of a lesser extent than the administrative costs then intervention was not worthwhile