Question 1
Explain two types of government intervention that could be used to correct the market failure arising from the consumption of demerit goods.
Answers may include:
- Terminology: market failure, demerit goods.
- Explanation: of any two types of government intervention such as indirect taxes, legislation and regulation, education/awareness creation/negative advertising.
- Diagram could show market failure of demerit goods and/or demand and supply diagram showing the consequence of the policy explained.
A maximum of [6] should be awarded if only one form of government intervention is explained.
Assessment Criteria
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-2
- The response indicates little understanding of the specific demands of the question.
- Economic theory is stated but it is not relevant.
- Economic terms are stated but they are not relevant.
3-4
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
5-6
- The response indicates understanding of the specific demands of the question, but these demands are only partially addressed.
- Relevant economic theory is partly explained.
- Some relevant economic terms are used appropriately.
- Where appropriate, relevant diagram(s) are included.
7-8
- The specific demands of the question are understood and addressed.
- Relevant economic theory is explained.
- Relevant economic terms are used mostly appropriately.
- Where appropriate, relevant diagram(s) are included and explained.
9-10
- The specific demands of the question are understood and addressed.
- Relevant economic theory is fully explained.
- Relevant economic terms are used appropriately throughout the response.
- Where appropriate, relevant diagram(s) are included and fully explained.