Government Intervention in Markets — Edexcel Past Paper Questions

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

With reference to Extract C, explain how incentives to use reusable coffee cups may lead to a fall in demand for single‑use cups.

1.2.2 Demand · 1.4.1 Government Intervention in Markets

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

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

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

The average UK household energy bill (gas and electric combined) rose 80% from £1 971 in 2021 to £3 549 in 2022. Evaluate possible methods of government intervention to control household energy bills in the UK.

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

1.4.1 Government Intervention in Markets · 3.6.1 Government Intervention

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

Explain the likely impact of the new 2020 TACs on the price of cod. Include a supply and demand diagram in your answer.

1.2.6 Price Determination · 1.4.1 Government Intervention in Markets

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

With reference to Figure 2, calculate the percentage increase in outstanding student loans from 2013 to 2018. You are advised to show your working.

1.4.1 Government Intervention in Markets

Evaluate whether government intervention is able to correct market failure in education.

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

1.4.1 Government Intervention in Markets · 1.4.2 Government Failure

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

Calculate the annual revenue raised by charging £12 per GP visit. Assume there will be 450 million GP visits per year and 90% of these will not be charged. You are advised to show your working.

1.4.1 Government Intervention in Markets

Evaluate possible ways the government could intervene to reduce the excess demand for state-funded health care.

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

1.4.1 Government Intervention in Markets

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

Explain why ‘bans on tobacco advertising’ (Extract A, line 7) may result in a decrease in the revenue of tobacco firms. Include a supply and demand diagram in your answer.

1.2.2 Demand · 1.4.1 Government Intervention in Markets

Evaluate the impact of government intervention in the cigarette market.

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

1.4.1 Government Intervention in Markets · 1.2.9 Indirect Taxes and Subsidies

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

With reference to Extract A, assess the likely impact of the Help to Buy scheme on the market for rented properties in the UK.

1.4.1 Government Intervention in Markets · 1.2.6 Price Determination

Evaluate the likely microeconomic effects of government intervention in the UK housing market.

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

1.4.1 Government Intervention in Markets

Evaluate the case for government provision of goods and services such as flood defence schemes or housing.

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

1.3.3 Public Goods · 1.4.1 Government Intervention in Markets