| Tortillas are made from white corn (maize). An increase in the price of corn in recent months has forced large-scale Mexican milling firms and local tortillerías to increase the prices they charge for these essential goods. Supermarkets and local shops in Mexico are expected to raise the price of corn tortillas by 25 per cent by the end of this year. | 1 |
| Tortillas are a central part of the Mexican diet, with average consumption estimated at over 75kg per-capita annually. According to some business leaders, the cost per tortilla remains extremely low compared to other carbohydrate sources. However, consumer advocacy groups have accused a small number of dominant agricultural conglomerates of exploiting their market power to drive up prices. | 5 |
| Mexican consumer associations have asked the Mexican government to intervene in the tortilla market to reduce the prices of staple goods. These groups have also organized boycotts, urging citizens to buy directly from independent local producers rather than large supermarket chains on designated protest days. | 10 |
| Water scarcity, extreme heatwaves, and the growing global demand for livestock feed are widely blamed for the sharp escalation in corn prices. | 14 |
'Mexican consumer associations have asked the Mexican government to intervene in the tortilla market to reduce the prices of staple goods' (Extract C, lines 10-11).
Using the data and your economic knowledge, evaluate the economic case for and against the Mexican government intervening in the tortilla market to try to reduce tortilla prices.
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.