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3.8 Limitations of markets

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Question 61

Paper mills discharge untreated waste into a river, harming people downstream. A government pilot compares three policies. It records the average untreated waste discharged per mill each week before and after each policy was introduced.

PolicyAverage untreated waste before (kg per week)Average untreated waste after (kg per week)Share of legal-limit inspections passed
Tax on paper production6048Not applicable
Legal limit on waste discharge603690%
Information campaign for paper buyers6054Not applicable

Using the pilot results, evaluate whether the government should choose the legal limit rather than either of the other policies to reduce harm to people downstream.

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Markscheme

3.8 Limitations of markets Questions

  1. GCSE
  2. /Economics
  3. /3.8 Limitations of markets

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.

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