Economics · Unit 2: Microeconomics

EC2.7 — Role of government in microeconomics

Economics · SL / HL · syllabus-mapped notes

1. EC2.7.1

   Reasons for government intervention in markets

   Explain the seven reasons a government intervenes in a market, from raising revenue to correcting market failure and promoting equity.

2. EC2.7.2

   Main forms of government intervention in markets

   Explain how price controls, indirect taxes, subsidies, direct provision, regulation and nudges each work, and calculate their effects from a diagram.

3. EC2.7.3

   Government intervention in markets, consequences for markets and stakeholders

   Evaluate who gains and who loses from intervention, consumers, producers, government and society as a whole.