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Economics - Ethan Parmar > T8 - gov intervention > Flashcards

T8 - gov intervention Flashcards

(73 cards)

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1
Q

What is it

A

Regualtory action taken by the gov to seek changes of desciosn made by poeple and firms about social and eco matters

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2
Q

Reasons for gov in

A

Correct MF
Improve distrubution of incoem and wealth
Imrove eco performance

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3
Q

What will gov intervene on

A

Public goods
Prinicpal agent problem
Info failiure
Inequality
Monopoly power
Macro instability
Moral hazard
Factor immobility
Externalitles
Demerit and merit goods

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4
Q

What is pricniple agent problem

A

where the pricnipal has oen objective andthe agent has another, plsu info assytmetery causing a cofnlcit of inetrest

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5
Q

Pro free market view of gov intervension

A

Price fucntion allocates best
Competition is key
Only some int on shit liek pub goods

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6
Q

Inetrvnsionist view on gov reg

A

Gov is needed to reduce marker failiure, no other option

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7
Q

Gov intervention methods

A

Subsidse
Tax
Regulation
Information
Permits
Price regualtion
State Provision

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8
Q

What is a max/min price

A

Where firms cant go above/below these prices

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9
Q

When will gov impose max price

A

When not happy with equilibrium

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10
Q

What does max prices and min prices do

A

Creates excess demand and supply
Black markets

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11
Q

adv on max price

A

consumer welfare
monopoly power
competition
merit goods

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12
Q

dis adv of max price

A

Excess demand
lack of supply
black markets

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13
Q

adv of min price

A

incentives to producer
fuck demrit goods

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14
Q

dis advof min price

A

too high prices
regressive and inequality
black markets
inneficincy adn complacency

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15
Q

eval of max and min prices

A

elasticities?
inc inequaltiy?
set at teh right level
black marktes

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16
Q

when will a min price have little impact

A

when below free market equilibrium

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17
Q

What are subsidise

A

Payment to consumers or firmss

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18
Q

Purpose of subsidise

A

To reduce to cost of prodyctuon or consumption (shift supply curb to the right)

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19
Q

When are subsidise used

A

For merit goods or psotive extenality

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20
Q

What is a direct subsidy

A

Straight to the consumer boosting demand

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21
Q

What si a guarnetteed payemnt

A

min price

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22
Q

What is an input subsidy

A

for costs of prodcution

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23
Q

How is total spendign on a subsidy calculated

A

Susbsidy price per (ON SUPPLY LIEN AT NEW MARKET EQUILBRIUM) unit multiplied by leevl of output

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24
Q

When there is inelastic demadn what happens to the subsidy

A

It has a larger effect on equilibrium price

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25
Impact fo subsidy for producer
Inc revenue
26
Impact fo subsidy for consumer
Lower prices, higher qtty
27
Pros of subsidy
Helps firms Increased demand Macro conflict Merit goods
28
Arguments against subsidise
Is it fair, who is aided Costly to governemnt distort market mechansim Encourages innefficny
29
Evalautions of subsidy argyments
Productivity and efficny? Who pays for the cost of it Will firms pass onto onsumer Gov failiure
30
What is taxation
Fee charged by the gov onicnoem or activity
31
Purpose fo tax on negatiev xxternaltiies
make consumers/producers pay the full social cost
32
Adv of tax on MF
Source of tax revenue Changes prices to true prices
33
Dis adv fo tax on MF
Unfair Regressive adn inquality black markets laffer affect macro clash
34
what can be said to be a good positive thing for taxes
gov can get inc tax revenue to correct more MF
35
eval fo tax
elastsicity of demand? regressive? what is the level set at determined by? will it causes inneffciny?
36
how can any increase in price be regressive
those on lower incoems will pay mroe, those on higher nto affected as much
37
What is a tradeable permits
A permit that allows owners to produce a certain amount fo say pollution , which then if unsued can be traded to anothe rpolluter
38
adv of permits
incetive to ecplore other methods fair for firms lowers market failirue can be sold ebtween firms
39
cons of permits
high admin costs rich can just buy black markets
40
eval of permit
who gets how much? can firms afford fines of not following? affect comp? will firms just lie?
41
What is state provision
Gov finances the prodcution of a raneg of goods through taxation then provides them for nearly free to consuemrs or for free
42
adv of state proviso
equitable social optimum level reduce ineuality
43
cons of state aid provision
costly to gov
44
what are the two methdos not incldued in teh STRIPPS acronym
privatisation and nationalisation
45
Reasons for why gov Should interve
Equality Provision of public goods Education Shift consumer behaviour Portects enviroment Reduce monopoly power Strategic planning of infrastrtcure
46
Dis adv of gov intervntion
Gov failiure Lack on incetives Less choice Impac perspnal frreedom
47
Adv of free market economy
Efficent allocation of scarce resoruces Comeptitiev prices Inovation and inevtnion Profit motive Comepetiton
48
how may govs inetevene to correct factor mobility mf
education and training
49
how may gov intevene to correct mf of public goods
state provision
50
how may gov intevrent to deal with oc of demerit
rasising prices makign consuemr more aware
51
how may gov ineteven to deal with uc of emrit goods
reducing prices makign consumer more aware
52
how to know whcih gov int method to talk about
go through STRIPPS and say whetehr implementign or removign the method woudl affect shit eg woudl rising taxes on demrit goods do shit
53
how may the gov itnervent of inperfect ifno
info regulation
54
how may the gov itnervene on relative povery and ineuqality
reducing prices regualtion on labour markets
55
how may the gov deal with monopoly power causign mf
comp policy regualtion price regualtion subsidse to new firms
56
how to deal with inforamtion failirue
inc suppl of information inc education regualtion on advertising indsutey standards
57
how to icnrease demadn for ifnoramtion
lower cost of it maek it publci good simplify it
58
evalatuion fo governemtn regualtion
comp and efficncy effect enforced proeplry and regualtoruy capture what about other methods
59
when are there no chocies but to regualte
with firms such as natrual monopolies gov firms
60
woth regards to the firm adn type of market what si teh eval for regualtion
what type fo firm is ti, what good are they providing, hwo comeptitiev si the market,
61
with regards to vested ifnleucne what is the evalatuion for regualtion
will it be biased and swayed by publci pressure groups, poltiicans and cosnumers
62
example of when taxes woudl be sued
when the prices of shit is too low really on sn profits
63
when woudl susbdise be used
when mf causes to high prices and underproduction
64
when would regaltion be used
too high prices lack fo competition info failiure labour markets
65
when woudl degregulation be used
protmote comeption
66
when woudl ifnormation be used
for mf where there is a lack of shit comeptition dealign with assytmetries factor immoviloty
67
when woudl max prices be used
equilibrium price is too high for social optimum level
68
when would min prices be used
when there is too low of an equilibrium price for social optimium level
69
when would permits be used
when shti liek regaultion,t axes and other methods are just shite
70
when would state prvosion be used
for shit that there is a lack of in a free market
71
when would nationalisation be used
monopoly power to high costs in private sector
72
when woudl privatisation be sued
lack of effcinecy costly on budget
73
what can icn reguaktion and anythign that causes firsm to experience lower demand or higher price cause
greater innovation from firms

Economics - Ethan Parmar (73 decks)

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