Quelpr
5 marksMarket Failure

CAPE Economics Unit 1 · 2005 · Paper 2 · Question 6(c)(iii)

Discuss how beneficial externality influences governments' decision to provide the welfare services listed in (b).

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 6(a)Define the term 'social welfare'.[2 marks]
  2. 6(b)List FOUR services that governments in the region provide for their citizens free of charge OR at below cost.[8 marks]
  3. 6(c)(i)Discuss how vote getting influences governments' decision to provide the welfare services listed in (b).[5 marks]
  4. 6(c)(ii)Discuss how welfare equity influences governments' decision to provide the welfare services listed in (b).[5 marks]
  5. 6(d)(i)Define asymmetric information and give an example.[5 marks]
  6. 6(d)(ii)Define moral hazard and give an example.[5 marks]
  7. 6(d)(iii)Define adverse selection and give an example.[5 marks]
  8. 6(e)(i)Define the term 'minimum wage rate'.[2 marks]
  9. 6(e)(ii)Discuss TWO effects that the minimum wage rate may have on the welfare of workers.[8 marks]

More practice: the rest of this paper · more Market Failure questions · all CAPE Economics Unit 1 past papers