Examples Of Economic Intervention

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Register to read the introduction… Common examples of merit goods are healthcare and education because given the option, many people would choose to not consume these goods because they would rather spend the money elsewhere. Because there is an opportunity cost involved with the consumption of merit goods, or services, people will tend to under consumer them. Because the social benefits outweigh the private benefits, the Government must step in and either subsidize the good or provide it free of cost to the consumer. Education, for example, is funded through taxation so that all children will attend, whether or not they really want to, which will benefit society in the long run. Educated people are more productive members than society than the uneducated. A recent example of the government intervening and financing a merit good can be seen in the “Affordable Care Act”. The act, which was signed into law on March 10, 2010 by President Obama, is an example of our government intervening in a supposed market failure concerning healthcare. In the past, the cost of healthcare, or insurance, has outweighed the private benefit experienced by its consumption, which caused it to be under-consumed. Because of this, the Government chose to universalize healthcare …show more content…
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