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8 marksMarket Failure

CAPE Economics Unit 1 · 2017 · Paper 2 · Question 2(c)

Governments in many Caribbean countries provide free or low-cost health care funded by taxes and face criticism for the large expenditure.

Discuss TWO reasons why the market for health care may fail if it was not subsidised by the government.

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Other parts of this question

  1. 2(a)(i)Outline ONE barrier to entry.[2 marks]
  2. 2(a)(ii)Using the information in Table 2, calculate the Herfindahl-Hirschman Index (HHI).[3 marks]
  3. 2(b)Compare, with the aid of diagrams, the productive efficiency and economic profit of a perfectly competitive firm and a monopolistically competitive firm in the…[12 marks]

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