A government pays course providers a subsidy for each learner taking an evening vocational course. Course fees fall and enrolment rises, but some subsidised learners would have enrolled anyway and the spending replaces another public programme. Which statement gives the best evaluation of the subsidy?
It is good value if the external benefit from the extra learners outweighs the programme given up.
It is good value because it raises the demand for courses without changing their supply.
It is poor value because some of the payments go to learners who would have enrolled anyway.
It is good value if the private benefit to all subsidised learners outweighs the total subsidy paid.
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.