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1.6 Market failure

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Question 4

A chemical factory contaminates a river, while a smoker exposes nearby non-smokers to smoke. Which classification is accurate?

[1]
A

Both effects are private benefits because a product was sold

B

Factory pollution is a negative production externality and second-hand smoke is a negative consumption externality

C

Factory pollution is positive and second-hand smoke is negative

D

Second-hand smoke is a production benefit and river pollution is a consumption benefit

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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