Home | Forums MBA Managerial Economics Discussion Forum Reply To: MBA Managerial Economics Discussion Forum

  • Ishwinder Singh

    Member
    November 27, 2021 at 4:06 pm

    Government intervention is any action carried out by the government or public entity that affects the market economy with the direct objective of having an impact in the economy. Government intervention advocates defend the use of different economic policies in order to compensate the flaws of the economic system that give way to large economic imbalances.

    The Chinese government has imposed various restrictions on the industry for years, and they are known as some of the harshest in the world.

    The latest restrictions, announced at the end of August, limit gamers under the age of 18 to playing only between the hours of 8pm and 9pm on Fridays, Saturdays, Sundays and statutory holidays. This change was an update to a 2019 rule that limited minors to 90 hours of gameplay per day and three hours on holidays.

    Due to this, Shares of Tencent and Netease lost more the $60billion of value amid growing investor fears. Tencent shares closed down 8.48% in Hong Kong, while Netease fell 11%.

    As we see from above, the effect of government intervention on the regulation spectrum as it tries to control the video games industry for the younger generation as this will have a long-term benefit for the population as a whole. If children are not addicted to gaming or their mobile phone, they will be able to pursue a worthwhile goal (opportunity cost) i.e education, better mental health – as social media and gaming is a raising contributor to mental health.
    Tobacco taxation has many advantages to the economy, health and nation.

    Tobacco taxation can reduce smoking through change in smoking behaviour. Increasing prices of cigarettes would reduce consumption of cigarettes, if cigarettes consumption is low, government expenditure for smoking related diseases will reduce, as reported Malaysia has spend RM 15 billion( 1.7% of the GDP) on tobacco related healthcare cost – if tobacco related diseases are lower government can allocate the funds for better usage ( infrastructure, subsidies and etc.)

    Apart from that, due to increase in taxation (prices of cigarettes) and health related issues due to cigarettes. This has cost an opportunity for consumers to choose a healthier alternative which is vaping. The Malaysian Vape Chamber of Commerce said that Malaysian vaping industry is valued at RM 2.27 billion.