1). Government intervention in markets

• What is government intervention?

  Actions by the government that affect economic activity, resource allocation and the decisions made through the market mechanism.
• Possible government intervention to solve market failure includes:

  • -Taxation
  • -Pollution permits
  • -Extension of property rights
  • -Regulation / Legislation
  • -Subsidies
  • -State provision
  • -Price controls
  • -Encouraging sustainable development
• Government intervention and market failure: