A government is considering a subsidy for a first-aid course. Each person attending gains a private benefit, and people who do not attend may benefit if a trained person helps them in an emergency. The subsidy would be paid to course providers.
Explain how the subsidy is likely to affect attendance on the course and suggest one reason why it may not increase attendance as much as the government intends.
127 exam-style questions on OCR GCSE Economics 3.8 Limitations of markets, covering 3.8.1 Positive and negative externalities, 3.8.2 Policies to correct externalities, 3.8.3 Impact of externality policies, and 3.8.4 Costs and benefits of externality policies. Each one has a worked solution and a mark scheme showing where the marks go.