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

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Question 62

Extract C

Source: Economic and Environmental Policy Review, 2022

...The rapid expansion of local tourism enterprises has triggered significant debate among regional planners. While these businesses drive local economic growth and employment, they inevitably generate various externalities that affect non-consenting third parties, including local residents and regional ecosystems...

Explain what is meant by the term 'externalities' (Extract C) and analyse how tourism can create both positive and negative externalities.

[10]
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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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