Discuss the reason why governments might want to intervene and how they might do- with respect to the following "problem" in the functioning of an otherwise perfectly-competitive ("pareto-efficient") economy:
1. The unequal distribution of income
2. "Breakdowns" in efficiency (i.e. lower real aggregate income than achievable) in the following areas:
a) "Imperfect" competition
b) Externalities
c) Lack of information (both relative and absolute)