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

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Question 53

Extract D states: 'between 2022 and 2025, the average retail price of disposable vape pods rose by 42% more than the general price index, with the newly introduced health levy now representing approximately 30% of the final retail price.'

Draw a supply and demand diagram to show the effects on the market for disposable vape pods of the government imposing a specific indirect tax. The total area representing government tax revenue should be labelled clearly.

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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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