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Pearson Edexcel IAL Economics 1.3.6.2a 'Government failure' as intervent

Practise recognising when government intervention creates a net welfare loss, using examples such as smuggling after indirect taxation.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • distinguish government failure from market failure in a multiple-choice policy example
  • link an indirect tax to smuggling and a resulting net welfare loss in context

1.3.6.2a - 'Government failure' as intervention that results in a net welfare failure loss question 1

[Maximum number: 1]

Which one of the following is an example of government failure?

A

Government intervention leads to a net welfare gain

B

A new environmental regulation leads to excessive administrative costs

C

Speculators cause a market bubble to emerge in the housing market

D

Free riders lead to the underprovision of public goods

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