A quarry produces and sells loads of stone. The following costs apply to one load.
| Cost | Amount per load |
|---|---|
| Private cost paid by the quarry | £180 |
| Cost of dust and noise imposed on nearby residents | £40 |
The government introduces an indirect tax of £40 on each load sold.
Calculate the social cost of producing one load of stone.
Explain how the indirect tax may correct the 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.