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IB Economics SL 2.8.5 Responses to Externalities and Common Pool Resource Problems Questions

Practise IB Economics SL 2.8.5 by analysing taxes, subsidies, regulation, education, permits and provision as responses to externalities, using marked exam evidence.

Syllabus
First assessment 2022
Course
Economics SL
Level
SL

Exam points

  • Explain how Pigouvian, indirect and carbon taxes reduce negative externalities.
  • Explain how subsidies and government provision increase consumption of merit goods and correct positive externalities.
  • Identify regulation, education, advertising and tradable permits as policy responses to externalities and resource problems.
  • Use externalities diagrams to show how intervention can move output towards the social optimum.

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