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

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Question 55
Extract E: Estimated annual costs and benefits of Low Emission Zone (LEZ) cameras and Bus Lane cameras in eight metropolitan districts
Number of active zonesAnnual operational costs (£000)Annual penalty charge income (£000)Annual value of congestion/pollution reduction (£000)
LEZ cameras1506 2005 10018 500
Bus Lane cameras3204 1008 40012 300

Note: (i) Penalty charge income has been classified as a benefit for local authorities rather than as a cost to motorists. (ii) Bus lane cameras detect unauthorized vehicles occupying designated public-transit lanes during restricted hours.

Using Extract E, identify two significant points of comparison between the costs and the benefits of the two types of transit enforcement camera.

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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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