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Unformatted text preview: cases that are defined as positive externalities. No matter what type of externality it is, it prevents the economics system from total efficiency. To find a remedy, government has to step in. In fact, government plays a crucial role on the regulation of the economics system. Government can correct the system by placing proper taxation or subsidiary. Some economists argue that the government should not involve too much in the economy because government is a form of monopoly which might cause some problems; however, if the government does not regulate the system and provide several services which may not be available otherwise, residents of the countries will never have the chance to enjoy a safe and clean living quality. In order to provide certain goods such as education and national defense, governors need to be aware of deadweight loss....
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- Fall '11