A production quota is a limit set by the government on how much of a specific product a
Tag: market failure
causes of government failure
Government failure occurs when government intervention in the economy creates inefficient results rather than solving market problems. Key
government failure
Government failure happens when the government tries to step into the economy to improve a situation, but instead
regulation
Regulation refers to the rules, laws, and directives created by government authorities. These measures are designed to guide
ad valorem tax
An ad valorem tax is a type of tax based on the assessed value of an item, such
specific tax
A specific tax (also known as a unit tax) is a fixed amount of money charged for every
principal-agent problem
The principal-agent problem occurs when one person or group, called the agent, makes decisions for another person or
economic efficiency
Economic efficiency means that limited resources are used in the best possible way. This happens when it is
moral hazard
Moral hazard happens when a person or group takes more risks because they do not have to pay
asymmetric information
Asymmetric information occurs when one person or group in a deal has more or better information than the