Day: July 14, 2019

Which of the following is an example of government failure?

Select ONE answer:

1. an increase in obesity caused by overconsumption of sugar
2. a subsidy on sun cream which reduces the incidence of skin cancer
3. government health warnings on cigarette packets which deter people from smoking
4. 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

1. The is an example of market failure.
2. Harmful effects (and negative externalities) of exposure to the sun are reduced.
3. This is an example of successful provision of information to reduce overconsumption of a demerit good.
4. Correct: This will make it more difficult for poor people to rent accommodation.

 

This work is licensed under a Creative Commons Attribution 4.0 International License.