Discarded single-use cups create litter. How is a tax on each cup intended to reduce the misallocation?
It guarantees that demand for cups shifts right
It lowers the price paid by consumers and encourages consumption
It raises the private cost of using a cup and discourages consumption
It rewards producers for supplying more disposable cups
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.