Explain government activities is motivated by a concern about equality or a concern about efficiency. In the case of efficiency, discuss? Some examples A) Regulating cable T.V prices #Efficiency-the market failure come from cable firm B)Providing some poor people with vouchers that be used to buy food. #Equality C)Prohibiting smoking in public places #Efficiency – an externality arises because of smokes harm non-smokers
Answers
Answer:
Explanation:
a) Regulating cable TV prices is an efficiency enhancing measure that is aimed at eradicating the market failure of monopoly and ensuring that prices are affordable.
b) By providing some poor people with vouchers that can be used to buy food, the government is concerned with fairness to ensure everybody can access essential products.
c) By prohibiting smoking in public places, the government is concerned with efficiency and aims to discourage public smoking. In this case, the market failure is the negative health effects of smoking.
d) Breaking up Standard Oil (which once owned 90 percent of all oil refineries) into several smaller companies. This measure addresses efficiency by dealing with the market failure of monopoly in the oil market.
e) Imposing higher personal income tax rates on people with higher incomes is aimed at enhancing fairness through the redistribution of resources.
f) By instituting laws against driving while intoxicated, the government is concerned with efficiency. The measure helps to correct the market failure of rad accidents caused by drunk driving.