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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

a negative externality in consumption.

B

government failure due to unintended consequences.

C

market failure resulting from public goods.

D

the free-rider problem.

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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