A chemical factory contaminates a river, while a smoker exposes nearby non-smokers to smoke. Which classification is accurate?
Both effects are private benefits because a product was sold
Factory pollution is a negative production externality and second-hand smoke is a negative consumption externality
Factory pollution is positive and second-hand smoke is negative
Second-hand smoke is a production benefit and river pollution is a consumption benefit
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.