Without direct regulation or landfill bans, far too many disposable electronic cigarettes are consumed at prices determined by the price mechanism. The overall social costs to the wider environment and community resulting from vape disposal far exceed the private costs borne by the individual consumer. The private cost is represented by the market price paid at retail, along with any personal health risks. However, the social costs include the pollution from lithium battery chemical leaks into water systems, litter collection costs, and the public healthcare funding required to treat respiratory illnesses in non-smokers exposed to secondhand vapour.
Define the term 'price mechanism' (Extract C, line 2).
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.