Which one of the following scenarios describes a market failure that leads to a misallocation of resources, rather than the normal operation of the price mechanism?
A rise in the market price of agricultural land following a sustained increase in consumer demand for organic food crops
The under-provision of employee training schemes by private firms due to the risk of trained staff being poached by competitor businesses
A significant fall in the profit margins of domestic steel manufacturers following the removal of a government import tariff
The rationing of airline tickets through high prices during peak holiday periods when demand exceeds capacity
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.