Government Intervention and Policy-making

Play an AI-generated podcast conversation about this lesson

Why does the mere existence of 'market failures' not imply that government intervention is always desirable?

Pressure groups may influence policy-makers to act against social welfare. (correct)

Policy-makers always seek to maximize social welfare.

Lobbies always align their interests with broader society.

Government intervention is never justified from a technical viewpoint.

Why do relatively small and homogeneous groups have a disproportionate power to influence government decisions?

Because they align their interests with general society.

They do not face any 'collective action' problems.

They can overcome 'collective action' problems more effectively. (correct)

Due to their lack of interest in government decisions.

What is a risk associated with policy-makers seeking to maximize their own welfare instead of social welfare?

Small and homogeneous groups lose their influence on government decisions.

The interests of pressure groups align perfectly with general society.

'Market failures' become irrelevant in the decision-making process.

It may lead to misguided government interventions. (correct)

How do pressure groups or lobbies differ from the broader interests of society?

They often pursue particular interests rather than general interests. Signup and view all the answers

What may be a consequence of the activities of powerful 'pressure groups' or lobbies on government intervention?

'Market failures' may not be addressed in the best interest of society. Signup and view all the answers

What issue is compounded by the ability of small and homogeneous groups to influence government decisions?

'Market failures' are not addressed in the broader interests of society. Signup and view all the answers

What is the role of institutions in the functioning of markets?

To reconcile efficiency with economic security and social protection. Signup and view all the answers

Why might powerful social groups seek to block institutional change?

If they believe it could make them worse-off. Signup and view all the answers

Why does the theory of collective action suggest that groups may not always act in their self-interest?

Due to the premise that groups act like individual actors. Signup and view all the answers

In what type of groups may voluntary individual action be more common according to the text?

Groups where personal gain exceeds the cost of providing a collective good. Signup and view all the answers

Why does collective action often cease before reaching its optimal level for group members?

Because individuals may discontinue providing it once they've obtained some benefit. Signup and view all the answers

'Privileged' groups, as denoted in the text, are characterized by:

Each member receiving a large proportion of the total gain from a collective good. Signup and view all the answers

Government Intervention and Policy-making

Podcast Beta

Questions and Answers

Why does the mere existence of 'market failures' not imply that government intervention is always desirable?

Why do relatively small and homogeneous groups have a disproportionate power to influence government decisions?

What is a risk associated with policy-makers seeking to maximize their own welfare instead of social welfare?

How do pressure groups or lobbies differ from the broader interests of society?

What may be a consequence of the activities of powerful 'pressure groups' or lobbies on government intervention?

What issue is compounded by the ability of small and homogeneous groups to influence government decisions?

What is the role of institutions in the functioning of markets?

Why might powerful social groups seek to block institutional change?

Why does the theory of collective action suggest that groups may not always act in their self-interest?

In what type of groups may voluntary individual action be more common according to the text?

Why does collective action often cease before reaching its optimal level for group members?

'Privileged' groups, as denoted in the text, are characterized by:

More Quizzes Like This

Market Failure and Government Intervention Quiz

Government Interventions in Market Failures Quiz

Market Failure and Government Intervention

CH 2.2 : Public Sector Intervention

Upgrade to continue