Government Intervention Flashcards
1
Q
Cost - Benefit analysis
A
This is a form of investment appraisal - method of assessing full social costs and benefits including external costs and benefits of an investment project
2
Q
Government failure
A
When government intervention leads to a net welfare loss in society
3
Q
Government intervention
A
When the government intervenes in order to correct market failure
4
Q
Guaranteed minimum price(GMP)/ Minimum price
A
a minimum price or price floor in which prices cannot fall below, in agricultural markets this is guaranteed by the market
5
Q
Maximum price
A
Price ceiling above which prices can’t increase
6
Q
Minimum price
A
price floor beneath which prices cannot fall eg NMW
7
Q
Public good
A
Possess the characteristics of non excludability and non rivalry
