4 2 Simulation checkpoint.docx ECO 201 Module Four Simulation Checkpoint Assignment EC

4 2 Simulation checkpoint.docx  ECO 201  Module Four Simulation  Checkpoint Assignment  ECO 201  Government Tools: Discuss tools available to the government to correct a market failure. Provide examples from the textbook.  ï‚·Command and control policies: This the act of an externality by requiring or forbidding certain behaviors. For instance, there are bans on cutting down trees.  ï‚·Corrective taxes and subsidies: The government uses this tool by taxing activities that have negative externalities and subsidizing activities that have positive externalities. For example, the government uses these taxes and subsidizing techniques by taxing a company on a certain waste or rewarding a company for reducing the waste.  ï‚·Tradable Pollution Permits: This is the act of allowing companies a permit to use or create a certain amount of pollution. In this case, a permit would allow a company to emit a certain amount of pollution without being penalized.  Supply and Demand Equilibrium: Describe how government intervention affects the supply and demand equilibrium. Refer to the simulation game to explain your responses. The government can affect the supply and demand equilibrium by setting price ceilings and/or floors. They also affect this by charging taxes on a product or service. In the simulations, I learned that it was charging a nuisance charge which was an example of a tax that the government can charge. I noticed that this charge was taken off the top of the total of the sale. With the nuisance charge, I wa