Types of government intervention used to correct market failure (microeconomics)

The document provides exemplar answers for various types of government intervention for microeconomics. This resource would be useful for analysis and evaluation questions and includes diagrams where relevant. The methods used to correct market failure include:
• Indirect Taxation
• Subsidies
• Government expenditure/state provision
• Buffer stock control
• Price controls
• Legislation and regulation
• Information provision
• Competition policy
• Public-private partnerships
• Tradeable pollution permits
These methods are used to correct the following types of market failure:
• Negative consumption externalities
• Positive consumption externalities
• Negative production externalities
• Positive production externalities
• Merit goods
• Demerit goods
• Public goods
• Information failure
• Inequity