In May 2018, the Scottish Government introduced a minimum unit price for alcohol to reduce health and social harms. Such a policy would inevitably lead to government failure if:
the total tax revenue collected by the government from alcohol sales fell.
the welfare and administrative costs arising from the policy outweighed its economic benefits.
some consumers continued to drink high levels of alcohol in private settings.
domestic alcohol producers experienced a decline in profit margins.
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.