Practise IB Economics SL 2.8.6 by evaluating taxes, regulation, permits, subsidies and provision for externalities, merit goods and sustainability, with marked exam evidence.
Evaluate two possible government responses that could be used to address the problem of demerit goods.
N.B. It should be noted that definitions, theory, and examples that have already been given in part (a), and then referred to in part (b) should be rewarded.
Answers may include:
- definition of an indirect tax
- explanation of possible government responses such as taxation, legislation, outright ban, education or negative advertising
- diagrams to show the imposition of an indirect tax, the effects of negative advertising and education
- examples of government responses to negative externalities
- synthesis or evaluation.
If only one possible government response is evaluated, a maximum of level 2 ([9 marks]) may be awarded.
Evaluation may include: the relative difficulties of applying the policies to reduce the consumption of demerit goods.
Opinions or conclusions should be presented clearly and supported by appropriate examples.
Assessment Criteria
Part (b) 15 marks
Level 0 (0 marks): The work does not reach a standard described by the descriptors below.
Level 1 (1-5 marks): There is little understanding of the specific demands of the question. Relevant economic terms are not defined. There is very little knowledge of relevant economic theory. There are significant errors.
Level 2 (6-9 marks): There is some understanding of the specific demands of the question. Some relevant economic terms are defined. There is some knowledge of relevant economic theory. There are some errors.
Level 3 (10-12 marks): There is understanding of the specific demands of the question. Relevant economic terms are defined. Relevant economic theory is explained and applied. Where appropriate, diagrams are included and applied. Where appropriate, examples are used. There is an attempt at synthesis or evaluation. There are few errors.
Level 4 (13-15 marks): There is clear understanding of the specific demands of the question. Relevant economic terms are clearly defined. Relevant economic theory is clearly explained and applied. Where appropriate, diagrams are included and applied effectively. Where appropriate, examples are used effectively. There is evidence of appropriate synthesis or evaluation. There are no significant errors.