§-Quick questions
QLDEconomicsUnit 2: Modified markets
Quick questions on Market failure and government intervention (QCE Economics Unit 2)
9short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is market failure defined?Show answer
Market failure occurs when the competitive market fails to allocate resources efficiently. The market outcome differs from the socially optimal outcome.
What is costs of intervention?Show answer
Government intervention is justified only when the cost of intervention is less than the cost of market failure. Costs include:
What are australian examples?Show answer
Defence, public broadcasting (ABC, SBS), lighthouses, BOM weather services, ARC-funded basic research.
What is diagram for negative externality?Show answer
Demand and private supply, with social marginal cost above private marginal cost. Market equilibrium produces more than the socially optimal level. Deadweight loss = the triangle between the SMC and PMC curves over the over-production.
What is safeguard Mechanism reform?Show answer
Caps emissions from Australia's 215 largest industrial emitters, tightening 4.9 percent per year toward 2030.
What is future Made in Australia?Show answer
$22.7 billion industrial policy package for green metals, hydrogen, batteries, critical minerals.
What are supermarket sector reforms?Show answer
Following the ACCC inquiry, mandatory unit pricing, stronger Food and Grocery Code.
What is nDIS reform?Show answer
Demand-side reform of disability services; ongoing scope and cost adjustments.
What is free TAFE?Show answer
300,000 free places under the National Skills Agreement, addressing the positive externality of skills training.