1.
The rationale for government involvement in the market economy is that the government must
regulate certain aspects of the economy such as taxes and maintaining the market competition
before they become giant monopolies, not just the natural monopolies. There must be ordered by
the government in the market to make fair wages such as regulation of minimum wages in the
states, and unemployment insurance based on the individuals’ circumstances. They maintain
order and competition fairly in case there is an emergency such as a pandemic, the businesses
wouldn’t take advantage of consumers and hiking up the prices.
2.
The role of government in dealing with benefit externalities or positive externalities by helping
