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11 marksIntervention

CAPE Economics Unit 1 · 2009 · Paper 2 · Question 4(c)

Explain how governments can solve the problem caused by public goods.

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Other parts of this question

  1. 4(a)Select any three pairs from (i) Private cost and social cost, (ii) Merit good and public good, (iii) Positive externality and negative externality, and (iv)…[21 marks]
  2. 4(b)(i)Using suitable examples, explain how public goods cause market failure.[6 marks]
  3. 4(b)(ii)Using suitable examples, explain how externalities cause market failure.[6 marks]
  4. 4(b)(iii)Using suitable examples, explain how moral hazards cause market failure.[6 marks]

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