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

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Question 92

Extract C (lines 8–10) states: 'between 2018 and 2024, the retail price of high-sugar energy drinks rose by 28% more than general consumer prices, with the sugar tax now representing around 35% of the total retail price.'

Draw a supply and demand diagram to show the effects on the market for energy drinks 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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