Six roles of government
Not what you're looking for?
1. of the six roles of government listed: a) Providing a stable institutional framework; b) Promote effective and workable competition; c) Correct for externalities; d) Ensure for economic stability and growth; e) Provide for public goods; f) Adjust for undesired market results.
Which do you believe is the most controversial? Why?
2. Say the government establishes rights to pollute so that without a pollution permit you aren't allowed to emit pollutants into the air, water, or soil. Firms are allowed to buy and sell those rights. In what way will this correct for an externality?
Purchase this Solution
Solution Summary
This explains the six roles of government and its implications on the economy
Solution Preview
1. Correct for externalities is most controversial. First of all we should know what is an externality.
An externality is a spill over from an economic activity. It is often referred to as a by-product of the market mechanism (supply equals demand). Negative externalities are often viewed as examples of market failure, in other words, the market mechanism creates a level of consumption / production that is higher than society desires.
A negative externality occurs when the by-product is viewed as having a social cost. For instance, when ...
Purchase this Solution
Free BrainMass Quizzes
Economics, Basic Concepts, Demand-Supply-Equilibrium
The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.
Economic Issues and Concepts
This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.
Basics of Economics
Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.
Pricing Strategies
Discussion about various pricing techniques of profit-seeking firms.
Elementary Microeconomics
This quiz reviews the basic concept of supply and demand analysis.