1.4.1 Government intervention in markets
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what is the purpose for government intervention in markets?
support firms.
support poorer households.
correct market failure.
collect government revenue.
2
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what are the 3 main methods of government intervention?
indirect taxation.
maximum and minimum prices.
subsidies.
3
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why are maximum prices set by the government?
to increase affordability for necessity goods/services.
4
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why are minimum prices set by the government?
in order to help producers or to decrease consumption of a demerit good.
5
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Note 
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