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Due to government subsidy, the price of cooking oil, sugar and flour in the cheaper in the region (Malaysia, Indonesia, Thailand, Brunei, and Singapore). Also, the quantity supplied is decreased which will even leave some of the historical consumers wanting. These services are called non-excludable public services or goods. But since these subsidies do not go to small farmers, the developing countries need to seek complete removal of these subsidies before providing any more market access. GOVERNMENT INTERVENTION IN THE ECONOMY: A COMPARATIVE ANALYSIS OF SINGAPORE AND HONG KONG NEWMAN M. K. LAM* Department of Politics and Public Administration, University of Hong Kong, Hong Kong ABSTRACT Singapore and Hong Kong are very different and yet very similar in many respects. To reduce the subsidy effect in economic, government can adjust the taxation and benefit system. When some renters are ready to move, they sublease their apartment instead of ending their contract. Some countries, such as China and Cuba, are more inclined towards a command economy. In a free market, there tends to be inequality in income, wealth and opportunity. A price floor is the lowest legal price a commodity can be sold at. When demand is high, the potential profit from supplying to a market rises, leading to an expansion in supply to meet rising demand from consumers. Sweden was one of the world richer countries in 1970. Outside New York City, the New York State Division of Housing and Community Renewal (DHCR) determines maximum allowable rates of rent increases under rent control. The law of diminishing returns states that as income increases, there is a diminishing marginal utility. The government can control how much is produced. So the firm will not work hardly because they government subsidy will become a part of profit of them. Private charity tends to be partial. So government allows charging tax on every products or services. When that time the supply will less than demand, there will have a shortage. The government tries to combat market inequities through regulation, taxation, and subsidies. Most subsidies are made by the government to producers or distributors in an industry to prevent the decline of that industry or an increase in the prices of its products or simply to encourage it to hire more labor. What are the main reasons for government intervention? There have 4 types on incident of an indirect tax (inelastic demand, elastic demand, inelastic supply and elastic supply). They include nation’s defense and related services, price protection, flood control, protection of public monuments, buildings etc. They believe the Law of Demand and Supply is not sufficient in order to en… 1. The main reasons for policy intervention are: To achieve a more equitable distribution of income and wealth, To improve the performance of the economy. Current Government Involvement in the Economy Throughout the 20th century, Congress continued to enact these regulations meant to protect the working class from corporate interests. This is called a surplus. For the price that the ceiling is set at, there is more quantity demanded than quantity supplied. Subsidies can become expensive, note the opportunity cost. but the size of increase in price and decrease in quantity differs in each case, depending on the price and elasticity and demand and supply. Government intervention is needed because of the so-called market inefficiencies and failures. If the government pays people not to produce, then suddenly more producers will show up and ask to be paid. Although government implements the price ceiling to set the minimum price, subsidy also have their value in the market. People voted with their feet for smaller government and a lower tax burden. Malaysia spent record subsidy in 2009 RM 74 billion. Allocate the subsidy always exist fraudulence risk. Recently, the fuel price has fall until MYR 2.45 and it has dropped for the second time. As you might have guessed, this creates a problem. Government intervention to overcome market failure. It treats these subsidies as non trade-distorting and therefore excluded from any reduction commitments. Government intervention in the health care market is required to regulate the marketplace, establish the parameters for prices, and allocate and fund scarce resources (Mills, 2011). Market power may also prevail in input markets. Study for free with our range of university lectures! But due to some reason, the price of sugar, flour and cooking oil will be increased by Sugar + 20 sen / kg (every 6 months until 2012) Flour + 20 sen /kg (2010) + 25 sen / kg (2011) Cooking oil (1 kg) +15% (2010) +15% (2011), thereafter 5% every year until Jan 2014. 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