Which of the following is an example of government failure?
Select ONE answer:
- an increase in obesity caused by overconsumption of sugar
- a subsidy on sun cream which reduces the incidence of skin cancer
- government health warnings on cigarette packets which deter people from smoking
- government imposed rent controls which reduce the amount of rented accommodation available to the poor
Show your workings to arrive at your answer, and explain and justify your reasons:……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………
This multiple choice question is suitable for Economics KS5 classes.
The answer is 4
- The is an example of market failure.
- Harmful effects (and negative externalities) of exposure to the sun are reduced.
- This is an example of successful provision of information to reduce overconsumption of a demerit good.
- Correct: This will make it more difficult for poor people to rent accommodation.
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