Unit 1 - Introduction to markets and market failure
Class notes
Theme 1: 1.4.1b Government Intervention in Markets and Subsidies
11 views 0 purchase
Course
Unit 1 - Introduction to markets and market failure
Institution
PEARSON (PEARSON)
Book
Edexcel A level Economics A Book 1
Excellent study tool to revise the Government Intervention in Markets and Subsidies section part of the A-level Economics syllabus. This is tailored to the Edexcel specification but can also be used for other exam boards.
This is a relevant resource for both first-year and second-year students t...
Theme 1: 1.4.1e Other Methods of Government Interventions
Theme 1: 1.4.1d Pollution Permits
All for this textbook (21)
Written for
A/AS Level
PEARSON (PEARSON)
Economics A
Unit 1 - Introduction to markets and market failure
All documents for this subject (195)
Seller
Follow
gurneek
Content preview
Recap: How can the
government intervene
in markets to correct
market failure?
, Market failure is a situation
where the free market
mechanism does not lead to
Recap: an optimal/efficient allocation
of resources and the needs and
Market wants of societies are
not met. As a result, too much
Failure or too little of a product can be
produced, leading to a
net welfare loss (society is
worse off).
, Recap: Government intervention in marke
In a free market system, governments believe that markets themselves should be able to a
scarce resources and allow market forces of supply and demand to set the prices and the
subsequent quantity produced and consumed.
However, markets sometimes fail to allocate societies scarce resources effectively (market
requiring governments to intervene in order to allocate resources efficiently in order to tac
basic economic problem. This happens in a mixed economy.
This can take the form of:
• Indirect taxes
• Subsidies
• Maximum and minimum prices
• Pollution Permits
• State provision of public goods
• Provision of Information
• Regulation
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller gurneek. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $3.86. You're not tied to anything after your purchase.
