BSB113 Lecture Notes - Lecture 7: Demand Curve, Market Failure, Government Failure
Document Summary
Government intervention in the market may correct for economic inefficiency, but it can also cause economic inefficiency. Despites the economic efficiency led by the government intervention, there are definite reasons that a lack of government intervention would bring about economic inefficiency on a large scale. Market failure and government failure: question 2. 5. According to the private interest view of government regulatory policy, much regulation arises due to the successful lobbying of interest groups as they attempt to increase their own economic rents at the expense of the rest of society. Does this mean that lobby groups that aim to reduce private consumption and production activities such as smoking, illicit drugs-taking, deforestation and retail trading hours ultimately reduce economic efficiency? (p322) Not all can cause economic inefficiency and not all can be regulated by the government. Both of them will probably get married later and have two or three children.
