command-and-control policies, tradable pollution permits and corrective taxes and subsidies (Mankiw, 2021). Command-and-control policies are a type of direct
regulation that is imposed by the government, with the goal of achieving a specific goal. Examples of command-and-control policies include price controls and
production quotas. While command-and-control policies can be effective in correcting market failures, they can also have a negative impact on the economy as a
whole. Corrective taxes and subsidies are another type of government intervention that are used to correct market failures. Corrective taxes and subsidies are
often targeted at specific sectors of the economy, in order to counteract the effects of market failure (Mankiw, 2021). Corrective taxes and subsidies can be
successful in correcting market failures, but they can also have unfavorable impact on the economy as a whole. Tradable pollution permits are another type of
government intervention that is used to correct market failures. Tradable pollution permits are often used to limit the emissions of pollutants from specific
sources (Mankiw, 2021). Tradable pollution permits can be effective in correcting market failures, but they might have a negative impact on the environment.
Each tool has its own costs and limitations. Overall, the government must carefully weigh the benefits of each tool before deciding on a course of action.]
[Government intervention is a term used to refer to actions taken by a government or other regulatory body to influence the supply and demand of
goods and services. This intervention can take many forms, including taxation, subsidies, regulations, and the provision of public goods (Mankiw, 2021).
Government intervention is an important tool which can have a profound impact on the supply and demand equilibrium. It affects the supply and demand
equilibrium by influencing the amount of a product that is bought and sold. For market’s equilibrium If a "price floor" is set below the "market's equilibrium"
price, demand will outstrip supply and lead to shortages if there is not enough of the commodity to go around. When a price floor is set above the market
equilibrium price, more of the good than is needed is produced. An item or service is considered in equilibrium when its supply and demand are equal (Mankiw,
2021). Our calculations showed that the robotic dog would incur a tax for being a nuisance due to the noise it created. In the simulation, the government
intervention to introduce nuisance fee, a form of tax affected supply and demand equilibrium. This intervention reduces the demand of robot dogs. When I
simulated with the revised policies, I manage only to sell one robot dog since demand was low therefore the “highest bid” prices were lower the value of the
robot dogs and selling at those prices could have resulted in a loss. Though in the first simulation I made a loss of $0.35 when selling the second dog.
[Government interventions can have a significant impact on consumer and producer surplus. Consumer surplus is the difference between the price a
consumer is willing to pay for a good or service and the price they actually pay while producer surplus is the difference between the price a producer is willing to
accept for a good or service and the price they actually receive (Mankiw, 2021). Government interventions can cause either a consumer or producer surplus,
depending on the specific policy or intervention. Price controls are an example of a government intervention that results in a consumer surplus. Under price
controls, the government sets a price for a good or service and allows consumers to purchase it at that price. This prevents consumers from paying more than the
intended price for the good or service and results in a consumer surplus (Mankiw, 2021). Producer surpluses can also be caused by government intervention.
Government interventions that increase consumer surplus include regulations that set price floors, preventing prices from being too low, and price ceilings,
preventing prices from being too high. These interventions help to ensure that consumers are able to purchase products and services at a fair price, and that
producers are able to earn a fair return on their investment. Government interventions that increase producer surplus include subsidies that provide financial
assistance to producers, enabling them to sell their goods at a price lower than what they would be able to sell them for in the open market. These interventions
help to ensure that producers are able to earn a fair return on their investment, and that consumers are able to purchase goods and services at a price lower
than what they would be able to purchase in the open market (Mankiw, 2021).]
