Lesson 18

Government Intervention

Vouchers and Subsidies

Subsidy – A payment

Were going to pay you to do nothing. Pay you for doing nothing. NOT unemployment. Subsidy is NOT unemployment. Unemployment is when you can’t work and haven’t been working. Subsidy – The government gives you money. WHY? To keep the economy going. To keep the economy running smoothly you have to have trade. (Welfare) everyone benefits. Subsidy applies often to farmers.

Pollution

Point source controls the pollution out of where it coming. They go to the source and tell them that its time to clean up. They also use a voucher system, as property rights to be dirty.

Voucher system

A voucher is a property right. Ex: Local environment method concentrates on pollution in designated areas. Every one with a smoke stack will be measured. You give every one a voucher telling them how dirty they can be. Property rights can be sold or traded. Some companies will by the rights to be dirty from other companies. By shifting the cost it’s going to be cheaper for the industry.