The use of air travel leads to market failure caused by negative externalities. With the help of a diagram, assess the extent to which a government can intervene to correct this market failure.

Marks: 20

The increased use of electric vehicles (EVs) is encouraged as part of governments’ climate change policies because they create fewer negative externalities than diesel and petrol (gas) vehicles. Evaluate, with the help of diagrams, two policies that a government may use to encourage the use of EVs.

Marks: 20

To improve allocative efficiency economists frequently advise governments to remove existing subsidies to the private sector providers of education. With the help of a diagram, evaluate this advice.

Marks: 20

The provision of health care by the public sector is inefficient, therefore all health care should be provided by firms operating in the private sector. Evaluate this comment.

Marks: 20

With the help of a diagram, assess the effectiveness of a government’s intervention in the price mechanism to address the causes of climate change.

Marks: 20

Market failure exists in all economies. Evaluate, with the aid of a diagram(s), the meaning of market failure and two policies a government may use to correct market failure.

Marks: 20

Governments in many countries are promoting policies that reduce the impact of the negative externalities. Evaluate, using appropriate diagram(s), the extent to which two policies used to reduce negative externalities can also improve allocative efficiency.

Marks: 20

Privatisation is often required by the International Monetary Fund (IMF) and the World Bank before they are prepared to offer support to countries requiring loans, grants, debt relief and debt cancellation programs. Evaluate the view that privatisation will always improve the allocation of resources in a country.

Marks: 20

Monopolies restrict output to raise prices and exploit consumers. With the help of a diagram, assess the extent to which a government should intervene in monopoly markets.

Marks: 20

Market failure is to blame for climate change and the inefficient allocation of resources. The only solution is for governments to intervene to improve resource allocation. Assess the extent to which you agree with this statement.

Marks: 20

Traffic congestion is a cause of allocative inefficiency. Evaluate, with the help of diagram(s), two policies that a government may introduce to reduce the problem of allocative inefficiency caused by traffic congestion.

Marks: 20

The fashion industry employs around 75 million workers, many of whom earn very low wages and work up to 16 hours a day. The industry contributes to 20% of global wastewater and 8% of all carbon emissions. 60% of clothes are made from plastics, 83 million tonnes of the 100 billion garments produced are sent to landfill, and only 20% are collected for recycling. Consider to what extent an equitable solution can be found for market failures in the fashion industry.

Marks: 20

The introduction of a trade union into a perfectly competitive labour market will always lead to higher wage levels and a higher level of unemployment. With the help of a diagram, evaluate this statement.

Marks: 20

Wages in a perfectly competitive labour market will always be higher than wages in a monopsony labour market. With the help of a diagram evaluate this statement.

Marks: 20

With the help of a diagram, evaluate the consequences of imposing an effective minimum wage on the employment level and the wage level in a monopsony labour market.

Marks: 20

With the help of a diagram, assess whether the impact of an increase in labour productivity on the wages and employment of a firm is likely to be greater in a perfectly competitive labour market than in an imperfectly competitive labour market.

Marks: 20

Evaluate whether the marginal revenue product theory (MRP) always explains the differences in wages.

Marks: 20

The average wage of chief executives in large companies in a country is over 100 times greater than the average wage of their employees. Assess how economic theory can account for this variation in average wages.

Marks: 20

With the help of a diagram, assess the importance of the supply of labour in relation to the wage and employment levels for firms operating in perfectly competitive and monopsony labour markets.

Marks: 20

Training workers improves their human capital and increases productivity. This benefits the workers, their employers and the government. Consider the extent to which training should be paid for only by workers.

Marks: 20

Governments and trade unions should be excluded from taking part in wage negotiations as their intervention always causes higher levels of unemployment. With the help of a diagram(s), evaluate this statement.

Marks: 20

Some firms in oligopoly markets choose to collude rather than engage in price competition. This will lead to higher prices and a less efficient allocation of resources. Evaluate this statement.

Marks: 20

Some firms frequently use price discrimination. Assess the view that when this occurs, price discrimination will always benefit the producer at the expense of the consumer and society.

Marks: 20

Evaluate, with the help of a diagram(s), how total market demand and minimum efficient scale may determine the form of market structure in an industry.

Marks: 20

A government allows the merger of two large firms in the same industry. With the help of a diagram evaluate the view that this merger should not have been allowed.

Marks: 20

The model of perfect competition is the ideal form of market structure because it is the most efficient. With the help of diagrams, evaluate this statement.

Marks: 20

Evaluate the view that monopolistically competitive firms will always charge lower prices and operate more efficiently than a monopoly firm.

Marks: 20

The long-term equilibrium position in perfect competition is frequently used to illustrate efficient resource allocation in a free market economy. Explain why this is so and consider what prevents efficiency from being achieved.

Marks: 20

Evaluate, with the aid of a diagram(s), whether excess profit (supernormal profit) is always necessary for the continued existence of firms in perfect competition and monopoly.

Marks: 20

Evaluate the consequences for the price and output of a firm if it changes its objective from profit maximisation to sales maximisation as a response to the principal-agent problem.

Marks: 20

Oligopolies are able to avoid price competition while maintaining supernormal profits in the long run. Evaluate this statement.

Marks: 20

The growth of a firm using a takeover is desirable because it enables consumers to benefit from lower prices and the firm to gain additional profits. Evaluate this statement.

Marks: 20

The degree of competition that a firm experiences is determined only by the barriers to entry into its market. With the help of a diagram(s), evaluate this statement.

Marks: 20

With the help of a diagram, evaluate the impact on consumers and producers of an increase in market contestability.

Marks: 20

Subnormal and supernormal profits are only experienced in the short run and only by firms in perfect competition. With the help of diagrams, evaluate this statement.

Marks: 20

With the help of a diagram(s), assess the view that larger firms always have lower average costs than smaller firms.

Marks: 20

Third-degree price discrimination benefits the firm but not its customers. With the help of a diagram, assess the consequences of third-degree price discrimination to both the firm and its customers.

Marks: 20

Although firms in an oligopolistic market may be in competition with each other, they will find it advantageous to collude. With the help of a diagram or a payoff matrix, evaluate this statement.

Marks: 20