User interface language: English | Español

Date May 2017 Marks available 10 Reference code 17M.1.SL.TZ2.02
Level Standard level Paper Paper 1 Time zone Time zone 2
Command term Explain Question number 02 Adapted from N/A

Question

Explain why demerit goods are an example of market failure.

[10]
a.

Evaluate the effectiveness of using indirect taxation to correct market failure.

[15]
b.

Markscheme

Answers may include:

Marks should be allocated according to the Paper 1 markbands for May 2013 forward, part A.

a.

Answers may include:

Evaluation may include: the impact on different stakeholders in terms of price, consumption, production, employment, welfare and the wider economy; the problems of determining the level of tax to achieve the socially efficient output.

Marks should be allocated according to the Paper 1 markbands for May 2013 forward, part B.

b.

Examiners report

[N/A]
a.
[N/A]
b.

Syllabus sections

Last exams 2021 » Section 1: Microeconomics » 1.4 Market failure » Types of market failure » Negative externalities of production and consumption
Last exams 2021 » Section 1: Microeconomics » 1.4 Market failure » Types of market failure
Last exams 2021 » Section 1: Microeconomics » 1.4 Market failure
Last exams 2021 » Section 1: Microeconomics

View options