11 questions on Positive and Negative Externalities in Consumption and Production (AQA specification 1.8.4) from the A-Level Economics papers, 2017–2023. Every question links to the official mark scheme at the page its answer begins on.
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Extract C (lines 3–4) states that ‘the mining, manufacturing and disposal process for batteries could soon become an environmental disaster.’ With the help of a diagram, explain why the production and sale of lithium-ion batteries might lead to market failure.
Extract B (lines 20–21) states that ‘all vehicle owners should be forced to pay the full costs of their driving. This would incentivise people to consider using public transport, cycling or walking.’ Evaluate policies that could be used to reduce the environmental impact of all types of car.
The UK government has set a target to reduce net greenhouse gas (GHG) emissions to zero by 2050. To what extent, if at all, do the data suggest that to achieve its net-zero emissions target, the government should focus on reducing GHG emissions from the transport sector? You must use the data in Extract C to support your assessment.
Explain why, without government intervention, markets are likely to allocate too few resources to dealing with the problem of climate change.
1.8.2 The Meaning of Market Failure · 1.8.4 Externalities
Using the data in Extract A (Figure 1) calculate the percentage of all plastics produced in the period 1950–2015 which have either been sent to landfill or incinerated. Give your answer to one decimal place.
Explain how the data in Extract A (Figure 2) show that higher living standards lead to greater volumes of waste per capita being produced.
Extract C (lines 17–19) states: ‘Many environmental economists suggest that making firms pay for the costs of landfill associated with their products, or taxing raw material inputs, will be necessary to ensure a sustainable future for all.’ Using the extracts and your knowledge of economics, evaluate policies, if any, that governments in developed countries should pursue to reduce waste and encourage the recycling of waste products.
Explain why the use of petrol and diesel cars may be a source of market failure.
Assess the view that regulation is a better policy for dealing with the problem of air pollution than the allocation of property rights or taxation.
To what extent, if at all, do the data suggest that the reliance on fossil fuels to produce energy is falling? You must use the data in Extract C to support your assessment.
Explain why, in a free market, sugary drinks may be overconsumed.
1.8.5 Merit and Demerit Goods · 1.8.4 Externalities
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