Public Policy in Economics Essay

554 WordsMar 7, 20143 Pages
Learning Team Reflection - Public Policy in Economics VanAngela Marquez, Courtney Jenkins, Johnny Kersh, and Tanisha Chism ECO365 February 27, 2014 April Jones Learning Team Reflection - Public Policy in Economics Week four focuses on public policy in economics with the purpose of evaluating the effect of externalities on market outcomes, identifying and distinguishing the three types of mergers, and examining the impact government has on economic behavior. Learning Team B collaborated and discussed the readings for the week. Chapter 8, Taxation and Government Intervention, highlighted producer and consumer surplus, the burden of taxation, as well as government intervention. The equilibrium capitalizes on both, the producer and consumer surpluses. Determining who bears the burden of tax depends on relative elasticity. “The relative burden of tax follows this general rule: The more inelastic one’s relative supply and demand, the larger the burden of the tax one will bear.” (Colander, 2010). The author further elaborated on how such government interventions can be viewed as both a tax and a subsidy that does not appear on official financial records. Learning Team B also talked about the difference between price controls and taxes. Price ceilings generate a deficiency or shortage, taxes do not. Chapter 18 was about the antitrust policy and regulation. The antitrust policy is a set of guidelines regarding the competitive process. There are two competing viewpoints, judgment by performance and judgment by structure. The Sherman Antitrust Act of 1892 is a law intended to normalize the competitive process. Learning Team B discussed the three modern antitrust cases, AT&T, IBM, and Microsoft. We also examined and identified the differences between mergers, acquisitions, takeovers, and hostile takeovers. A merger consists of two organizations
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