Government Intervention & Unintended Consequences

What this note covers

1. Why governments intervene: from market failure to the policy toolkit
2. Indirect taxes: shifting supply to make the polluter pay
3. Subsidies: shifting supply (or demand) to reward beneficial activity
4. Regulation: bans, standards, mandates and quotas
5. Government advertising: shifting demand with information
6. Unintended consequences: when intervention itself reduces efficiency

6 sections · 14 key terms & formulas · 6 common mistakes