Give Brief explanation for distribution income, imperfect competition, externalities and lack of information.
Discuss the reason why governments might want to intervene and how they might do- with respect to the subsequent "problem" in the functioning of an otherwise perfectly-competitive ("pareto-efficient") economy:
1) The unequal distribution of income
2) "Breakdowns" in efficiency (i) e. lower real aggregate income than achievable) in the subsequent areas:
a) "Imperfect" competition
b) Externalities
c) Lack of information (both relative and absolute)