Get premium membership and access questions with answers, video lessons as well as revision papers.

Explain how the following cause non market failure (i) Limited control over market responses (ii) Limited control over bureaucracy (iii) Limitations imposed by the political process

      

Explain how the following cause non market failure
(i) Limited control over market responses
(ii) Limited control over bureaucracy
(iii) Limitations imposed by the political process

  

Answers


Faith
Limited control over market responses: the government has limited control over the consequences of its actions

Limited control over bureaucracy: parliament, government and local government design some government agency. The agency may also be responsible for ensuring the regulations are enforced.

Limitations imposed by the political process: choosing among many alternatives through the political process would raise conditional probabilities. This is because the government affects many people but are decided upon by a limited group. The decision makers have to ascertain the preferences of their constituencies and they have to find some way of reconciling among conflicting preferences. Government may therefore act in an inconsistent manner.
Faimus answered the question on February 25, 2019 at 19:25


Next: What are the causes of government failure?
Previous: Due to lack of information the government imposes distortionary taxes. What are the effects of such taxes?

View More Economics Questions and Answers | Return to Questions Index


Learn High School English on YouTube

Related Questions