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3. Government microeconomy intervention

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3 topics · 13 learning objectives

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  1. 3.1 Reasons for government intervention in markets

    1. 3.1.1Public goods non-provision

      • Addressing the non-provision of public goods

    2. 3.1.2Merit and demerit goods

      • Addressing the over-consumption of demerit goods and the under-consumption of merit goods

    3. 3.1.3Price controls

      • Controlling prices in markets

  2. 3.2 Methods and effects of government intervention in markets

    1. 3.2.1Indirect tax impact/incidence

      • Impact and incidence of specific indirect taxes

    2. 3.2.2Subsidy impact/incidence

      • Impact and incidence of subsidies

    3. 3.2.3Direct provision

      • Direct provision of goods and services

    4. 3.2.4Maximum and minimum prices

      • Maximum and minimum prices

    5. 3.2.5Buffer stock schemes

      • Buffer stock schemes

    6. 3.2.6Information provision

      • Provision of information

  3. 3.3 Addressing income and wealth inequality

    1. 3.3.1Income vs wealth

      • Difference between income as a flow concept and wealth as a stock concept

    2. 3.3.2Gini coefficient

      • Measuring income and wealth inequality: - Gini coefficient (calculation not required)

    3. 3.3.3Reasons for inequality

      • Economic reasons for inequality of income and wealth

    4. 3.3.4Redistribution policies

      • Policies to redistribute income and wealth: - minimum wage - transfer payments - progressive income taxes, inheritance and capital taxes - state provision of essential goods and services