A household decides whether to install loft insulation. It considers the lower heating bill it would receive, while the country also benefits from lower national energy demand and lower emissions.
What is most likely to happen if households base their decisions only on the benefits they receive themselves?
More households install loft insulation than society would choose
No households install loft insulation
Households install the amount society would choose
Fewer households install loft insulation than society would choose
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.