Nothing Special   »   [go: up one dir, main page]
Scribd Logo
Upload

Welcome to Scribd!

  • 117 views

    46 Gov Int - Subsidies Qs

    Uploaded by

    Incognito
    A subsidy is a government grant given to producers to lower production costs and shift the supply curve outward. This decreases price and increases quantity produced, moving toward socially optimal output. For example, governments may subsidize education. Subsidies are not without issues, as the appropriate subsidy size is uncertain if based on externalities, they require tax funding, can reduce efficiency, and are subject to political influences rather than pure economics. While more schools are failing benchmarks, average state school performance is 56.6% achieving key benchmarks, showing benefits but also costs to state-provided education.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    46 Gov Int - Subsidies Qs

    Uploaded by

    Incognito
    117 views2 pages
    A subsidy is a government grant given to producers to lower production costs and shift the supply curve outward. This decreases price and increases quantity produced, moving toward socially optimal output. For example, governments may subsidize education. Subsidies are not without issues, as the appropriate subsidy size is uncertain if based on externalities, they require tax funding, can reduce efficiency, and are subject to political influences rather than pure economics. While more schools are failing benchmarks, average state school performance is 56.6% achieving key benchmarks, showing benefits but also costs to state-provided education.

    Original Description:

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    A subsidy is a government grant given to producers to lower production costs and shift the supply curve outward. This decreases price and increases quantity produced, moving toward socially optimal output. For example, governments may subsidize education. Subsidies are not without issues, as the appropriate subsidy size is uncertain if based on externalities, they require tax funding, can reduce efficiency, and are subject to political influences rather than pure economics. While more schools are failing benchmarks, average state school performance is 56.6% achieving key benchmarks, showing benefits but also costs to state-provided education.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    117 views2 pages

    46 Gov Int - Subsidies Qs

    Uploaded by

    Incognito
    A subsidy is a government grant given to producers to lower production costs and shift the supply curve outward. This decreases price and increases quantity produced, moving toward socially optimal output. For example, governments may subsidize education. Subsidies are not without issues, as the appropriate subsidy size is uncertain if based on externalities, they require tax funding, can reduce efficiency, and are subject to political influences rather than pure economics. While more schools are failing benchmarks, average state school performance is 56.6% achieving key benchmarks, showing benefits but also costs to state-provided education.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    46.

    Government Intervention - subsidies


    1. Fill in the missing words
    A subsidy is a government __grant_________ given to producers in order to __lower ___________ production costs
    and so shift supply or the _____marginal___________ private cost curve out to the right. This will lower the price and
    ___increase____________ the production of the good and so move consumption towards the _socially___________
    optimal output. An example of a good that the government subsidises is ___ education_________________. Choose
    words from: socially, increase, education, lower, grant, marginal
    2. Complete the two diagrams below, labelling the curves and annotating as required.
    Supply and demand diagram showing a subsidy Positive externality diagram

    Label all the curves and then show: Label all the curves and then show:
     Old and new price and quantity  Socially optimal and free market price and output
     Incidence of subsidy on producers and consumers  The impact of the subsidy on the curves and so the
    new free market equilibrium
    3. Explain the following evaluation points when considering whether subsidies are beneficial
    3.1 Imperfect information on the size of the positive externality: ___The amount of subsidies in this case would be
    uncertain and the benefits are unknown.___________________________________

    3.2 How are subsidies funded: ____ As spending is cut elsewhere or tax increases or budget deficits are reduced,
    paying for subsidies may indicate opportunity costs
    ___________________________________________________________

    3.3 Impact on firms’ efficiency: ___ Subsidies foster inefficiency and may help non-competitive businesses that
    struggle.____________________________________________________________

    3.4 The role of political lobbying and normative decision making: ____ Subsidies are not necessarily distributed based
    on pure economic considerations, and the position of political interests and value judgments can lead to poor decisions
    being taken. __________________________________

    3.5 The incidence and price elasticity of demand: __________________________________________________


    4. Data response - Much ado about learning
    The number of schools failing to meet government benchmarks on GCSE grades and progress has doubled to 330
    schools in the wake of the changes. The changes include tougher exams, banned re-sits and some vocational and
    academic qualifications being stripped from the tables. Many top private schools have ended up at the bottom of the
    GCSE tables, despite dominating the A-level tables. Schools such as Eton, Harrow, Winchester and St Paul's scored
    0% in the government's measure of five good GCSEs including English and Maths. Schools with fewer than 40% of
    pupils reaching this are deemed to be failing. School performance data released by the Department for Education
    www.a-zbusinesstraining.com
    shows that on average 56.6% of pupils in state schools in England achieved the benchmark of five good GCSEs
    including maths and English. Adapted from BBC News Online 29 January 2015
    4.1 Give two examples of the external benefits of education. _________________________________________

    __Labour efficienty and faster implementation of


    technology____________________________________________________________________________________

    4.2 Assess the benefits of state provided education. _State school education ensures people will attend educational
    settings, so that we can move closer to a level of production that is economically feasible. There is an opportunity cost
    in which one has to pay for private school education, however there are also complaints that state education less of a
    high quality. _______________________________________________

    ______________________________________________________________________________________

    www.a-zbusinesstraining.com

    You might also like