National Standards in Economics
Name: Government Failure
- Students will understand that: Costs of government policies sometimes exceed benefits. This may occur because of incentives facing voters, government officials, and government employees, because of actions by special interest groups that can impose costs on the general public, or because social goals other than economic efficiency are being pursued.
- Students will be able to use this knowledge to: Identify some public policies that may cost more than the benefits they generate, and assess who enjoys the benefits and who bears the costs. Explain why the policies exist.
- Students will understand that: People usually respond predictably to positive and negative incentives.
- Students will be able to use this knowledge to: Identify incentives that affect people's behavior and explain how incentives affect their own behavior.