Essay questions on government intervention in markets
Explain the main factors that determine the level of contestability in a market.
To what extent is it desirable that all markets should become more contestable?
Case study: MAJORITY OF AMERICANS THINK THAT GOVERNMENT INTERVENES TOO MUCH
The efficiency of resource allocation in an economy would be improved by a reduction in the amount of government intervention. Discuss.
Data response questions on government intervention in markets
Using the data, discuss the view that the use of tradeable pollution permits is better than a carbon tax as a means of reducing greenhouse gas emissions.
Using the data, discuss whether countries such as South Africa should follow the UK's example of state provision of healthcare that is free for all patients when needed.
Case study: Housing problems?
Using Extract A and a demand and supply diagram(s), outline why rents were forecasted to rise so greatly between 2023 and 2026.
Case study: Housing problems?
Using the data, discuss whether making homes easier to buy is beneficial to the UK economy.
To what extent will an absence of private property rights lead to market failure now that the UK has left the EU?
Using calculations in your answer, explain why the total wage cap in 2020 might have been said to be "too low".
Using a diagram in your answer, discuss if the removal of the maximum price of labour was the main cause of the wage growth of elite players since 1961.
Case study: Cross-railing
(i) Define the term 'government failure' and explain why the building of new infrastructure could be considered an example of government failure. (ii) Using the data, assess the extent to which the building of Crossrail would be positive for the short run and long run macroeconomic performance of London and the South East.
Case study: Corbynomics
Using a demand and supply diagram, consider who benefits the most from a decrease in ad valorem tax (line 2), the consumer or the firms?
Using a demand and supply diagram, show the likely impact of this change in tax rates.
Using the data, discuss the extent to which Modi's economic policies (page 7) have been successful in bringing back the "good days" to the Indian economy.
Case study: Rise of Palm Oil
(i) Define the meaning of a subsidy. (ii) Using the data and a diagram, outline the likely impact of the subsidy on biofuel on the producer and consumer.
Case study: Rise of Palm Oil
Analyse how a decrease in the price of tradeable pollution permits could lead to increased carbon dioxide (CO2) emissions.
Case study: Rise of Palm Oil
Discuss whether sustainability regulations for palm oil should be made compulsory rather than being left to voluntary schemes such as the RSPO.
With reference to the data, and using appropriate economic analysis, discuss whether governments should significantly increase indirect taxes on meat.
Case study: Australia – out on its own
With reference to Extract 2, explain the need for regulation of financial systems.
Using the data, discuss to what extent you agree that there would be damaging consequences to the Scottish economy from not cutting taxes for their higher earners.
Case study: A PLASTIC WORLD
Using a diagram, discuss whether Government subsidies for new environmentally friendly businesses and technology will be beneficial for the UK economy.
Case study: Last laugh for Laffer
With reference to Figure 1 and the data, discuss whether cuts in the top rate of income tax will be beneficial to an economy.
Case study: Last laugh for Laffer
(i) A worker on the National Minimum Wage in the UK would earn around £15 000 per year. Calculate how much income tax this person would pay in the 2019-20 tax year. (ii) UK MPs earn around £80 000 per year. Calculate how much income tax an MP would pay in the 2019-20 tax year. (iii) Using the data, discuss the relative merits and demerits of direct taxes and indirect taxes.
Using the data, outline what is meant by government failure.
With reference to the data, discuss whether US regulations on the development of new drugs are an example of government failure.
Case study: Competition regulator backs scrapping of rail franchises.
Using an appropriate diagram and with reference to the data, evaluate the view that the government should tax the use of private cars more heavily to provide more subsidies for the rail network.
Discuss how effective subsidies for electric cars are likely to be in reducing the number of petrol and diesel cars on UK roads.
To what extent might the decision to build a third runway at Heathrow be considered to be an example of government failure?
With reference to the data, outline how the high taxation of cigarettes might lead to government failure.
Multiple choice questions
- A-level Component 1, June 2024, Q8
A driver paid £90 for unleaded petrol, including 20% VAT. How much would the petrol have cost before VAT was added?
- A-level Component 1, June 2024, Q16
The diagram below shows the results of government action to reduce the consumption of a demerit good. Supply shifts from S1 to S2 and demand shifts from D1 to D2; the price rises from P1 to P2 and the quantity falls from Q1 to Q2. Which of…
- A-level Component 1, June 2022, Q17
The table below gives information on a hypothetical country's income tax structure. Annual income £10 000: tax due £1 000. £15 000: £1 200. £20 000: £1 400. £40 000: £2 400. £60 000: £3 000. It can be deduced from the above data that the…
