The numerous social goals that intervention needs to be identified in order to decide the optimum level of government intervention. Two of the main objectives of government intervention identified are; equity and social efficiency. (Sloman & Wride 2009).
Equity – If some people are living in great affluence while other people are living in poverty then it shows that they free market fails to lead to fair distribution of resources. The government should have a duty and role to redistribute incomes from the rich to the poor through tax and also through the benefit system, they should also provide legal protection in the form of minimum wage. (Sloman & Wride 2009).
Social efficiency – When the marginal social benefits (MSB) of producing and consuming
Equity – If some people are living in great affluence while other people are living in poverty then it shows that they free market fails to lead to fair distribution of resources. The government should have a duty and role to redistribute incomes from the rich to the poor through tax and also through the benefit system, they should also provide legal protection in the form of minimum wage. (Sloman & Wride 2009).
Social efficiency – When the marginal social benefits (MSB) of producing and consuming