| NCEA
External Achievement Standard - Economics 3.3 |
|
Demonstrate an understanding of allocation via the public
sector.
The
student is able to:
|
| |
|
Credit
|
Merit
|
Excellence
|
·
define market failure and describe its characteristics.
·
describe appropriate methods that the government
can use to compensate for market failure.
·
illustrate market failure and government intervention.
|
·
explain the effect of government intervention
on resource allocation.
|
·
evaluate the effectiveness of government intervention
on resource allocation.
|
|
Market failure occurs when the market does not give efficient
or equitable outcomes. When assessing the definition of,
and description of the characteristics of, market failure,
a selection will be made from: |
 |
externalities
- positive and negative |
|
merit/demerit
goods |
|
public
goods. |
|
natural
monopolies |
|
income
distribution - horizontal and vertical equity. Equity-efficiency
trade-off. |
|
imperfect
competition. |
When assessing the description of methods that the Government
can use to compensate for market failure, a selection
will be made from: |
|
subsidy. |
|
taxation |
|
regulations |
|
public
provision/collective goods. |
|
public
ownership |
|
establishment
of property rights (e.g., Treaty issues, tradable rights,
pollution permits, carbon credits.) |
|
transfer
payments. |
| |
|
Source:
www.minedu.govt.nz |
