Government policies to achieve efficient resource allocation and correct market failure

What you'll learn

• Explain how a range of tools can be used to correct different forms of market failure, including specific and ad valorem indirect taxes, subsidies, price controls, production quotas, prohibitions and licences, regulation and deregulation, direct provision, pollution permits, property rights, nationalisation and privatisation, provision of information and behavioural insights and ‘nudge’ theory.
• Evaluate the effectiveness of the tools used to correct market failure.
• Define the meaning of government failure in microeconomic intervention.
• Explain the causes and consequences of government failure.

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