Government intervention in the market

mixed economic system- goods/ services are provided by both the state and by private firms/ individuals

LATER

L- legislation- laws to protect people/ society, restrictions on age/ consumption

A- advertisement/ awareness- strategic tactics to influence consumer behavior , promote health, safety, environmental/ social

T- taxation- main tool

E- expenditure- providing grants, a payment made to a firm/ househuld with the purpose of promoting growth

R- regulations- modfy the behaviour of firms/ individuals in the private sector, protectng workers, consumers,environment and the businesses

ains/ objectives of the government

1. achieve full employment - ensure that anyone who wants to work has access to employment opportunities

2. protect the environment- implements policies to preserve natural resources, reduce pollution and promote sustainability

3. promoting balanced regional development- develop all regions equally to ensure economic and social opportunities are available across the country

arguments for regulaton

• consumr protection- regulations ensure that consumers are protected from unsafe products and fraudulant practices

• environmental protection- regulations help preserve natural resources and reduce pollution, promoting sustainable development

arguments against regulations

• increased costs to firms- regulations often involve numerous detailed rules and extensive paperwork, creating a costly burden for those required to comply

• consumers pay- as more regulations are passed on to businesses, it can add substantially to the costs of doing business. these costs are often passed onto consumers in the form o higher prices

price ceiling- a price that is below the equilibrium price, it is a price above which suppliers cannot legally change

price floors- a price that is above the equilibriu price, it is a price which suppliers are guarenteed to recieve