1.3.6 - Government intervention in markets

The purpose of government intervention, including reference to methods of market failure. government.

Use a - purpose of government intervention, including reference to methods of market failure. to connect the rule to the data and decision in the question.

This matters because a - purpose of government intervention, including reference to methods of market failure. determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - purpose of government intervention, including reference to methods of market failure. to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - purpose of government intervention, including reference to methods of market failure. is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Methods of intervention: intervention; indirect taxation (ad valorem and specific); subsidies; maximum and minimum (guaranteed) prices.; tradeable pollution permits; extension of property rights; state provision; regulation; provision of information.

Use b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • to connect the rule to the data and decision in the question.

This matters because b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - methods of intervention: intervention • indirect taxation (ad valorem and specific) • to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Methods of intervention: intervention • indirect taxation (ad valorem and specific) • is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Contexts in which governments may intervene:; health; housing; education; transport; environment; energy; agriculture; commodities.

Use c - contexts in which governments may intervene: • health • housing • education • transport to connect the rule to the data and decision in the question.

This matters because c - contexts in which governments may intervene: • health • housing • education • transport determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply c - contexts in which governments may intervene: • health • housing • education • transport to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: c - Contexts in which governments may intervene: • health • housing • education • transport is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

'Government failure' as intervention that results in a net welfare failure loss.

Use a - 'government failure' as intervention that results in a net welfare failure loss to connect the rule to the data and decision in the question.

This matters because a - 'government failure' as intervention that results in a net welfare failure loss determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply a - 'government failure' as intervention that results in a net welfare failure loss to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: a - 'Government failure' as intervention that results in a net welfare failure loss is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.

Causes of government failure include information gaps, lack of incentives, unintended consequences, excessive administrative costs and moral hazard.

Use b - causes of government failure to connect the rule to the data and decision in the question.

This matters because b - causes of government failure determines what can be inferred or chosen; begin with the stated conditions and keep the conclusion tied to the evidence.

Example: apply b - causes of government failure to one small, clearly defined case, show the key step or comparison, and explain the result in words.

Boundary: b - Causes of government failure is not a universal recommendation. Check the syllabus scope, assumptions, units and the limits of the evidence before generalising.