Use LEFT and RIGHT arrow keys to navigate between flashcards;
Use UP and DOWN arrow keys to flip the card;
H to show hint;
A reads text to speech;
6 Cards in this Set
- Front
- Back
|
Government failure |
When government intervention leads to an inefficient allocation of resources and a net welfare loss |
|
|
Distortion of price signals |
Distorts the price mechanism so that resources are missllocated |
|
|
Unintended consequences |
Intervention has negative impacts the government don’t expect |
|
|
Excessive admin costs |
Uses lots of money regulating and enforcing |
|
|
Government information gaps |
Intervention that has been made without sufficient information leading to a misallocation of resources |
|
|
4 categories of government failure and examples |
-distortion of price mechanism: minimum prices- common agricultural policy for EU -Unintended consequences: subsidies of energy in developing countries -Admin costs: fishing quotas -Information gaps: fishing quota for EU set too high |
