Answer:
Government should intervene in markets of services related to human capital formation i.e Education & Health
Step-by-step explanation:
Human Capital Formation is the development of skills & abilities in the human resource, making them more productive - through components like Education & Health
Government should intervene in these markets because:
- These sectors (education, health) have long term & irreversible impacts on human resource i.e public
- Their sellers have perfect information, but buyers have imperfect information about the quality of services
- There is a risk of firms acquiring monopoly powers & exploiting the consumers
- These are important to people's well being, but are unaffordable by many poor people
So: to prevent people from - long term adverse impacts, wrong information, monopoly exploitation & to make available to poor people. Govt intervention is necessary is certain markets.