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

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Question 49

In 2018, a regional government introduced a tax on single-use plastic packaging to encourage environmental sustainability. Following the introduction of this policy, firms rapidly switched to using heavier paper bag alternatives, which led to a substantial increase in carbon emissions from transport and manufacturing. This is most likely to be an example of

a negative externality in consumption.

government failure due to unintended consequences.

market failure resulting from public goods.

the free-rider problem.

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