This is a question from MHS SAC 2013 (no solutions given, unfortunately)
Which of the following is not a government attempt to correct market failures?
A- Competition and Consumer Act 2010
B - Charging $23/tonne to polluters for carbon emissions
C - The implementation of a personal income tax
D- Government provision of minor roads.
Spoiler
I chose C because D is the government contributing to a market failure? BUT I thought income redistribution is not an example of govt. correcting market failures?
ALSO, one quick question: Does opportunity cost have to be in dollars, or can it be just a policy?
Eg. NDIS - approx $500 mill
Gonski reform - approx $500 mill
Five F/A 18 Hornets for Defence - approx 500 mill
Assuming the government makes a rational decision, What is the opportunity cost from implementing Gonski reform if a feasibility study finds that the most value will be gained from the Gonski reform, followed by the NDIS then the F/A 18 Hornets.
A- Benefit gained from introducing a NDIS
B- $500 million
C- Impossible to tell
D - Benefit from NDIS and purchasing five F/A 18s.
Spoiler
I chose B because I think opportunity cost has to be assigned a monetary value. I am also leaning towards A.
Thanks!!