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1.8 The market mechanism, market failure and government intervention in markets

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Question 64

In a market environment, competitive firms manufacture single-use plastic packaging, generating substantial environmental waste.

If the government attempts to internalise this negative externality by imposing an indirect tax on the manufacturers, this would

A

shift the market demand curve to the left.

B

shift the market demand curve to the right.

C

shift the market supply curve to the left.

D

shift the market supply curve to the right.

Markscheme

1.8 The market mechanism, market failure and government intervention in markets Questions

  1. A Level
  2. /Economics
  3. /1.8 The market mechanism, market failure and government intervention in markets

378 exam-style questions on AQA A Level Economics 1.8 The market mechanism, market failure and government intervention in markets, covering 1.8.1 How markets and prices allocate resources, 1.8.2 The meaning of market failure, 1.8.3 Public goods, private goods and quasi-public goods, 1.8.4 Positive and negative externalities in consumption and production, 1.8.5 Merit and demerit goods, 1.8.6 Market imperfections, 1.8.7 Competition policy (A-level only), 1.8.8 Public ownership, privatisation, regulation and deregulation of markets (A-level only), 1.8.9 Government intervention in markets, and 1.8.10 Government failure. Each one has a worked solution and a mark scheme showing where the marks go.

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