Ch 8 - Methods of Government Intervention in Markets

________: where goods and services are bought and sold illegally.

________ imposed price controls are necessary for consumers, producers, and societies Price controls:

________: firms willing to sell at a lower price don't always get to do so.

________: an amount of money paid by the government to a firm per unit of output.

a tax on spending/expenditure

the tax is the percentage of the selling price

who pays the tax

people spend money, time, and effort to deal with shortages

firms willing to sell at a lower price don't always get to do so

a tax on spending / expenditure. Governments tax firms which increases its costs

the tax is the percentage of the selling price

• Define

• Explain all key concepts

• Example from the real world

• Diagram

• Conclusions

• Long and short term effects

• Assumptions

• Stakeholders

• Priorities

• Pros and cons

The outcome of the share of tax burden, size of market and amount of producer/government revenue depends on the PED and PES

an amount of money paid by the government to a firm per unit of output

economic activity that takes place outside government sanctioned channels

people who want it and are willing to pay don't get goods and people who are interested in the convenient price get it

people spend money, time, and effort to deal with shortages

sellers offering low quality goods at a low price even though buyers prefer higher quality / higher prices