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Government Intervention - Coggle Diagram

- - - - better off
        
        government gain political popularity
        
        consumer get to buy at lower price
      - worse off
        
        consumer didn't get a chance to buy due to long wait and shortage increase black market
        
        producer receive less revenue
        
        workers may be laid off
        
        Government loss for government budget
        
        society - shortage, underallocation of resources led to inefficiency
  - - - better off
      - worse off
        
        consumer need to pay for higher price
        
        government - increase in government expendiature
- - - - consumer expenditure: P(consumer) x Q(subsidy)
      - producer revenue: P(producer) x Q(subsidy)
      - Government expenditure (kotak): (Pp-Pc) x Qs
      - Welfare loss (triangle menghadap kiri):
        ((Pp-Pc) x (Qs-Q))/2
  - - - Better off: fall in price with increasing quantity
    - - Better off: higher revenues as price increase
    - - Worse off: Burden on government budget
    - - Better off: hire more workers to produce extra output
    - - Worse off: overallocation of resources
    - - Worse off: unable to compete due to lower price of domestic goods
- - - - Excise taxes can be:
        
        specific taxes -> a fixed amount of tax per unit of G&S
        
        ad valorem taxes -> a fixed percentage of the price of G&S
  - - - Worse off
        
        Consumers: receiving less goods and paying more for it
        
        Producers: fall of the price receive and fall in quantity sell
        
        Workers: lower amount of output means fewer workers needed, higher unemployment
        
        Society: underallocation of resources
      - Better off
        
        Government: higher revenue