CAIE A-Level Economics 7.4.5 Deadweight welfare loss
Practise using marginal social cost and benefit diagrams to locate output gaps, welfare loss and allocative efficiency.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- identify the deadweight welfare loss area on externality diagrams
- predict output changes needed to move from market equilibrium to allocative efficiency
- explain how positive consumption externalities can leave market output below the efficient level
7.4.5—Deadweight welfare loss question 1
Global carbon emissions
A key message of the 2021 World Climate Summit was that the use of coal must be phased out for the good of the planet.
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With the help of a marginal social cost and benefit diagram discuss whether the continued use of coal to produce electricity makes the achievement of allocative efficiency less likely.
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