Government intervention in markets：練習問題

A government decides to switch from a specific tax of \(£5\) per unit to an ad valorem tax of 10% on a product. Which statement correctly describes the nature of an ad valorem tax?

A government reduces the total number of tradeable pollution permits available in a cap-and-trade scheme. What is the most likely consequence for the market of these permits and the environment?

A government imposes a specific tax of \(£2\) per unit on a product for which the demand curve is perfectly inelastic (\(PED = 0\)) and the supply curve is normally upward-sloping. How will the burden of this tax be distributed between consumers and producers?

Which of the following is the main economic argument for using tradable pollution permits (cap and trade) as opposed to fixed pollution quotas (command and control)?

Explain why the government might choose to use tradable pollution permits rather than direct regulation to control negative production externalities caused by carbon emissions.

Explain the concept of 'regulatory capture' and outline why it represents a form of government failure when attempting to correct market failure.

Evaluate the potential impact of imposing a binding maximum price (price ceiling) on essential rental housing, specifically focusing on the non-price consequences for consumers in the long run.