Government Intervention in Markets (AQA A-Level Economics): Quizzes
📚Quizzes
Practise the questions
10 questions from this quiz
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Practise the questions
10 questions from this quiz
What role do pro-free market economists believe government should play in the economy?
What role do pro-free market economists believe government should play in the economy?
A 'nightwatchman' with minimal interference
Why do governments provide public goods like national defence through taxation?
Why do governments provide public goods like national defence through taxation?
The free-rider problem makes market provision impossible
What is the 'polluter must pay principle'?
What is the 'polluter must pay principle'?
Gov calculates externality value & imposes as tax
Why might taxes on demerit goods like tobacco not significantly reduce consumption?
Why might taxes on demerit goods like tobacco not significantly reduce consumption?
Demand is inelastic due to addictive properties
What happens when a price ceiling is set below the free-market equilibrium price?
What happens when a price ceiling is set below the free-market equilibrium price?
Excess demand is created
What effect does a minimum wage set above the free-market wage rate have?
What effect does a minimum wage set above the free-market wage rate have?
Creates excess supply of labour (unemployment)
When does a price floor have no effect on a market?
When does a price floor have no effect on a market?
When set below the free-market price
How do tradable pollution permits create incentives to reduce emissions?
How do tradable pollution permits create incentives to reduce emissions?
Companies can sell spare permits for profit
Why might completely banning pollution from coal power stations be inappropriate?
Why might completely banning pollution from coal power stations be inappropriate?
It would prevent electricity production too
What do interventionist economists believe about markets?
What do interventionist economists believe about markets?
They are often uncompetitive with monopoly power