Project Introduction: Research and analyze the effects of the following governme
ID: 2495188 • Letter: P
Question
Project Introduction:
Research and analyze the effects of the following government policies on the market equilibrium.
1. Increases in the Minimum Wage
2. Restrictions on International Trade
3. Pollution Controls
4. Natural Monopolies and Anti-Trust Regulation
ES2550: Project Page 5
When analyzing these policies, include some discussion of the following points when appropriate:
A. What is the purpose of the policy?
B. Provide the rationale for the government policy. In this section, discuss how asymmetric information creates a need for the policy.
C. Note 1: The necessity of the policy should be related to the purpose.
D. Note 2: A discussion of asymmetric information should include defining how the information is unequal between consumers and producers as well as any adverse selection or moral hazard issues involved.
E. The welfare of consumers, producers, and society (the winners and losers) before and after the policy.
F. How does this policy affect the fairness of the distribution of costs and benefits?
G. Does government intervention improve the situation?
Note: Discuss whether government intervention affected the asymmetric information problem, adverse selection, or moral hazard previously discussed.
Explanation / Answer
We know that market in equilibrium means that the point of intersection of demand and the supply curve. When market in equilibrium where the quantity demanded and the quantity supplied are equal. To correct the market equilibrium government can introduce lots of regulations will applied. The important government regulation are given below:
1. Increases the Minimum wages
The government regulations for minimum wages means that the government tackling low pay is to enforce minimum wage rates for the employers. When increases the minimum wage rate it is always greater the equilibrium wage rates the demand for labour will be increased and firms hire more workers to employ. This will result an increase in the level of employment. But the minimum wage legislation cannot be benefitd for the existing employees. also the the minimum wages will be prevent the market from clearing when there is an increase in emloyement.
2.Restriction of international trade
Another regulations for the government is to be the restriction of the international trade. The trade restrictions are actually do by the government becuase the effort to protect companies and workers in the home country. The government protectionsist policies the country restrict the importation of goods and services produced in the foriegn country. The imporatnt restriction policy of the government are:
1. Quota
2. Tarrif
3. Pollution controls
We know that the pollution control is the important policy of the government. The pollution control is here is that the government will ensure that the people get good environment. To control the pollutions the government will introduce the pollution tax rates and other subsidy for the environmental standereds. This will create a good environment in the economy.
4. Natural monopolies and anti trust regulations.
We know that the government is always control the natural monopolies. We know that the natural monopolies means that conducive to industries where the largest suppliers derives cost adventages and must be regulated the minimum risk. The government control of natural monopolies include:
1. Average cost pricing
2. Price ceiling
3. Rate of return regulations
4. Taxes or subsidy.
A)
The government is makes for the welfare of the people. We know that the government policy is an action which intends to change certain situations. Any policy when governments are make then people will be get benefits. The above four policies are very common polices for the government. It will usd to abolosh certain things, And do certain things,etc. The four government policies are used in the different format of the economy. The minimum wage laws are more applicable in the labour market in the economy. It will create more employment. The trade policy is protect the infat industries in the economy as well.
B)
We know that Asysmetric information means that a situation in which one party in a transation has more or superior information compared to another. For the efficient function of the government needs the accurate information. This will create the efficient market in the economy.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.