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1.6 Market failure

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Question 11

From 2018, a levy was charged on soft drinks with a high sugar content. Which outcome would show that the levy had helped to correct the market failure linked to sugary drinks?

[1]
A

Manufacturers cut the sugar in their drinks below the level that pays the levy, and the total sugar bought in soft drinks falls while sales volumes hold up

B

The levy raises money that the NHS spends on treating tooth decay, while the total sugar bought in soft drinks stays the same

C

Manufacturers keep their recipes and pass on the levy, so the price of high-sugar drinks rises while the quantity bought stays the same

D

Manufacturers cut the sugar in their drinks, but sales rise so much that the total sugar bought in soft drinks stays the same

Markscheme

1.6 Market failure Questions

  1. GCSE
  2. /Economics
  3. /1.6 Market failure

83 exam-style questions on AQA GCSE Economics 1.6 Market failure, covering 1.6.1a Market failure as misallocation of resources, 1.6.1b Government intervention, 1.6.2a Defining externalities, and 1.6.2b Positive and negative externalities. Each one has a worked solution and a mark scheme showing where the marks go.

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