Externalities — Edexcel Past Paper Questions

With reference to Extract A, discuss the likely private costs and external costs caused by meat farming. Use an appropriate diagram in your answer.

1.3.2 Externalities

High Speed 2 (HS2) was a £100 billion UK government rail project designed to expand the existing network. The journey time between London and Manchester would take just 1 hour and 11 minutes, 54 minutes quicker than today’s fastest time. Almost 900 homes, 1 000 businesses and around 60 ancient woodlands would be destroyed by its construction. Evaluate the likely microeconomic effects of building major infrastructure projects.

One of two options in Section C — candidates answered this or the other.

1.3.2 Externalities · 1.4.1 Government Intervention in Markets

In 2023, the UK prime minister Rishi Sunak said that he wanted to see all students in England study some form of mathematics until they reach the age of 18 to ‘ensure that they leave school better equipped for the jobs of the future’. This would require additional spending on education. Just half of all 16 to 19 year-olds study mathematics. Yet in a world where data is everywhere and statistics are vital in every job, the workforce will require more analytical skills than ever before. Evaluate the likely microeconomic effects of increased spending on education.

One of two options in Section C — candidates answered this or the other.

1.3.2 Externalities · 3.5.2 Supply of Labour

Explain one reason why consumers buy less than the social optimum quantity of healthy food.

1.3.4 Information Gaps · 1.3.2 Externalities

With reference to Extract D, discuss possible methods of government intervention to reduce electronic waste.

1.3.2 Externalities · 1.4.1 Government Intervention in Markets

Discuss the likely private costs and external costs of the production of plastic.

1.3.2 Externalities

Evaluate methods of government intervention which could be used to reduce the market failure associated with plastic waste. Use a diagram to support your answer.

One of two options in Section B — candidates answered this or the other.

1.4.1 Government Intervention in Markets · 1.3.2 Externalities

Examine one likely externality that arises when a producer generates electricity by burning gas. Use a diagram to show the external costs of production.

1.3.2 Externalities

With reference to Extract B, explain two external benefits associated with the consumption of ‘public service broadcasting’ (line 2).

1.3.2 Externalities

With reference to Extract C, discuss the likely private and external benefits of viewing educational websites and TV programmes.

1.3.2 Externalities

Evaluate possible methods of government intervention to reduce the environmental damage caused by the consumption of television content.

One of two options in Section B — candidates answered this or the other.

1.4.1 Government Intervention in Markets · 1.3.2 Externalities

Using 2021 estimates of carbon emissions, it is estimated that a petrol car journey from London to Glasgow emits approximately 3.3 times more carbon dioxide per passenger than the equivalent journey by train. Evaluate possible methods of government intervention to reduce carbon emissions caused by road transport in the UK.

One of two options in Section C — candidates answered this or the other.

1.3.2 Externalities · 1.4.1 Government Intervention in Markets

Some economists suggest that the market price of cod does not result in the socially optimum level of output. Evaluate the likely external costs from the over-fishing of cod. Use an appropriate diagram in your answer.

One of two options in Section B — candidates answered this or the other.

1.3.2 Externalities

Other than using a TAC, evaluate the policy options which could be used to reduce market failure resulting from over-fishing. Use at least one appropriate diagram in your answer.

One of two options in Section B — candidates answered this or the other.

1.4.1 Government Intervention in Markets · 1.3.2 Externalities

Using the information provided, explain one externality that arises in the food delivery market.

1.3.2 Externalities

Examine the likely impact of Thomas Cook’s plan ‘to reduce their airline emissions’ (Extract B, line 6) on the social optimum position. Use an appropriate externalities diagram in your answer.

1.3.2 Externalities

With reference to Extract A, explain one likely private benefit to students and one likely external benefit of higher education.

1.3.2 Externalities

The International Energy Agency has predicted that oil use by cars will peak in 2025 because of the increasing number of drivers switching to electric vehicles. Evaluate the likely microeconomic consequences of consumers shifting from vehicles powered by fuel obtained from oil to electric‑powered vehicles.

One of two options in Section C — candidates answered this or the other.

1.2.6 Price Determination · 1.3.2 Externalities

Discuss the likely success of policies to reduce the consumption of single‑use plastic bags in cities such as Istanbul.

1.4.1 Government Intervention in Markets · 1.3.2 Externalities

Evaluate the microeconomic and macroeconomic effects of increased government spending on education to promote healthy eating in the UK.

One of two options in Section A — candidates answered this or the other.

2.2.4 Government Expenditure · 1.3.2 Externalities

Evaluate the likely microeconomic and macroeconomic effects of imposing a tax on HFSS foods.

One of two options in Section A — candidates answered this or the other.

1.2.9 Indirect Taxes and Subsidies · 1.3.2 Externalities

Using the concept of external costs, evaluate whether nuclear power is under-provided or over-provided in the energy market. Use an appropriate diagram in your answer.

One of two options in Section B — candidates answered this or the other.

1.3.2 Externalities

Evaluate ways in which government intervention could be used to reduce carbon emissions. Use at least one appropriate diagram in your answer.

One of two options in Section B — candidates answered this or the other.

1.4.1 Government Intervention in Markets · 1.3.2 Externalities

In September 2016 the government approved the building of an £18 billion nuclear power station, Hinkley Point C, which will supply 7% of UK electricity for up to 60 years. The power station is funded by Chinese and French investment. Evaluate the likely private costs and external costs involved in such major power station construction projects. Use an appropriate externalities diagram in your answer.

One of two options in Section C — candidates answered this or the other.

1.3.2 Externalities · 1.3.1 Types of Market Failure

Examine the advantages of using an indirect tax as a means of reducing the use of disposable coffee cups.

1.2.9 Indirect Taxes and Subsidies · 1.3.2 Externalities

In 2015 a report by Public Health England recommended the imposition of a 20% tax on the sale of soft drinks that contain high levels of sugar. Evaluate the likely microeconomic effects of such a tax.

One of two options in Section C — candidates answered this or the other.

1.2.9 Indirect Taxes and Subsidies · 1.3.2 Externalities · 1.4.1 Government Intervention in Markets

Examine the likely impact of externalities of copper mining on firms and communities within Chile.

1.3.2 Externalities