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

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Question 8

The Crisis in UK Adult Social Care

Study the summaries of Extracts A, B, C, D and E below before answering the question.

  • Extract A: A statistical projection indicating that the UK population aged 85 and over is set to double between 2023 and 2045, significantly increasing the demand for intensive personal care.
  • Extract B: Evidence showing that real-terms funding allocated by local authorities to adult social care has fallen behind demand, leading to a rise in unmet care needs and the closure of multiple private care homes due to financial unviability.
  • Extract C: A report arguing that raising income tax or National Insurance to fund social care would disproportionately penalise working-age individuals, drag down disposable incomes, and potentially reduce overall economic productivity.
  • Extract D: Analytical data highlighting that delayed transfers of care (where hospital patients remain in NHS hospital beds because social care support packages are unavailable in the community) cost the NHS upwards of £1 billion annually.
  • Extract E: An independent proposal suggesting that rather than simply increasing direct grants, the Government should introduce a capped national insurance contribution, integrate health and social care services completely, and encourage private co-payments.

Question

After considering Extract E, and the evidence in Extracts A, B, C and D, would you recommend that the Government should significantly increase its direct funding for adult social care? Justify your recommendation.

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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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