Version 1 General Certificate of Education (A-level) January 2012 Economics (Specification 2140) Unit 1: Markets and Market Failure ECON1 Final Mark Scheme Mark schemes are prepared by the Principal Examiner and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all examiners participate in and is the scheme which was used by them in this examination. The standardisation
Words: 6026 - Pages: 25
Version 1 General Certificate of Education (A-level) January 2012 Economics (Specification 2140) Unit 1: Markets and Market Failure ECON1 Final Mark Scheme Mark schemes are prepared by the Principal Examiner and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all examiners participate in and is the scheme which was used by them in this examination. The standardisation
Words: 6026 - Pages: 25
Consumer surplus a. is the amount of a good that a consumer can buy at a price below equilibrium price. b. is the amount a consumer is willing to pay minus the amount the consumer actually pays. c. is the number of consumers who are excluded from a market because of scarcity. d. measures how much a seller values a good. Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willingness To Pay David $8.50 Laura $7.00 Megan $5.50 Mallory
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Consumer surplus a. is the amount of a good that a consumer can buy at a price below equilibrium price. b. is the amount a consumer is willing to pay minus the amount the consumer actually pays. c. is the number of consumers who are excluded from a market because of scarcity. d. measures how much a seller values a good. Table 7-2 This table refers to five possible buyers' willingness to pay for a case of Vanilla Coke. Buyer Willingness To Pay David $8.50 Laura $7.00 Megan $5.50 Mallory $4.00 Audrey
Words: 7979 - Pages: 32
tax and/or regulate activities that caused the externality to align the private cost with the social cost (Djerdingen, 2003, p. 2). He advocated that government regulation can enhance efficiency because it can correct imperfections, called “market failures” (McTeer, n.d.). In contrast, Ronald Coase challenged the idea that the government had a role in taking action targeted at the person or persons who “caused” the externality. He believed that government intervention did not necessarily
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The Industrial Revolution offered more machines making things under peoples operation. So production shifted from by hand and slow to faster and machine made in the Industrial Revolution. 9. a) market failure b) public good c) externality d) transfer payment e) fiscal policy 12. When you allow the market to determine how much of a good with an external cost is produced they will always overproduce these goods because their cost is always lower than the general consumers cost. 14. The difference
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intervening to try to stabilise the price of copper, for example, through setting up a buffer stock scheme. 2.Evaluate advantages and disadvantages of various methods of government intervention to correct market failure arising from aircraft emissions. 3. Discuss the likely effects on the retail market for coffee if there is a large increase in city centre rents. 4.In the UK, students face increasing tuition fees. Discuss the benefits and costs to society of abolishing all tuition fees. 5.Discuss
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In the third section of the paper, we will discuss the positive externalities of urban planning in Amsterdam. Finally we will look at, the possibility for this service to be provided by the private sector and whether market failure will arise if left to the provision of the free market. In this discourse, we will interconnect economic theories applying them to the merit good under review viz a viz (urban planning). Merit goods in general tend to be underprovided by producers or under consumed by
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What is an externality? Provide at least three examples. How does one of the examples you provided affect the market outcome? What is the role of government in addressing the implications of an externality you provided as an example? Is it possible that a government’s solution to a market failure would worsen the failure? Explain your answer. Externality is defined as an effect of a decision on a third party not taken into account by the decision maker. There are two types of externalities being
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in virtually every area of economic activity. They are defined as third party (or spill-over) effects arising from the production and/or consumption of goods and services for which no appropriate compensation is paid. Externalities can cause market failure if the price mechanism does not take into account the fullsocial costs and social benefits of production and consumption. The study of externalities by economists has become extensive in recent years - not least because of concerns about the
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