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Key Learning Outcomes for this area of the syllabus:
Summary Notes:
Market failure- Externalities, explanations and diagrams
Government intervention to correct externalities.
market failures diagrams 2021.docx
What is Allocative Efficiency?
Externalities and Market Failure
Article on Demerit goods- sugar
Often it is easy to simply say "it is difficult to measure externalities". However it is not impossible. Here is a link to a website that measures external costs of air pollution in Hong Kong
Public Goods and Common Access resources: What is the problem with the 2 images below?
Public Goods and Common Access resources: What is the problem with the 2 images below?
A selection of recent news clips linked to the concept of public goods
Student Essay:
(a) Explain why common access resources, such as fishing grounds, might become
depleted in the absence of a price mechanism. [10 marks]
(b) Evaluate the view that carbon taxes represent the most effective government
response to the threat to sustainability posed by the use of fossil fuels. [15 marks]
Essay_Minimum_Alcohol_Price.pdfRevision/summary test
(More) Summative assessment essays
(a) What role do prices play in the allocation of resources in free market economies? (12)
(b) Evaluate the options available to governments to overcome the failure of markets arising from the production and consumption of demerit goods. Illustrate your answer with examples where possible.(13)
May 2000 SL
Carefully distinguish between merit goods and public goods, illustrating your answer with examples”
To what extent is it desirable that the government should provide merit goods and public goods”
May 06 HL P1
Carefully distinguish between merit goods, demerit goods and public goods.[10 marks] (b) Evaluate the view that governments should always intervene in markets for such goods as cigarettes and alcohol.[15 marks]
May 2011 SLP1
Explain the roles of market forces and government in allocating resources in a mixed economy.
Evaluate the extent to which market forces should be used to lessen the problem of environmental pollution.
Summative Data Response Question
Market failure Data response.pdf
Summative test (test)
Test question on market failure. Dec 2010.docx
Common Access resources Question and model Answer
Some Great links to articles you could use for your IAs on market Failure
https://www.scoop.it/t/marketfailure
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