I need some help regarding my content my third paragraph for the 25mks. If the question is about argument FOR and AGAINST government intervention.
How can i explain how leaving things to the free market can solve the problem. And what advantages and disadvantages is there for this?
AQA Economics MOnday exam help. Watch
- Thread Starter
- 12-05-2013 00:58
- 12-05-2013 01:53
Your point would be no government intervention, so that paragraph would be AGAINST government intervention. The advantages would obviously be that there is no opportunity cost (as in subsidies, for example), that it saves government both time and money and that the market mechanism may be able to solve the problem anyway, with no risk of government failure (an example of this would be when demand for a demerit good is high, the market mechanism will see the prices increasing, which will potentially lower demand in the long-term).
Disadvantages is that the problem may not be resolved if the market was left to operate freely or that a new problem will arise (using the previous example, the gap between the rich and the poor would be widened because those with lower incomes will not be able to afford the good whereas those who are wealthier will not be affected).
A good advantage of no government intervention is always the possible government failures that may be caused by your previous solutions that you discussed in the first two paragraphs.
Hope that helped