DP Economics Questionbank

Discuss whether government regulation is the most effective way to deal with negative externalities of consumption.

Using an externalities diagram, explain why “business pollution” is leading to market failure in STP (paragraph [5]).

Evaluate the effectiveness of government regulations in achieving a reduction in the consumption of demerit goods.

Using an externalities diagram, explain why the construction of dams on the Mekong River might lead to market failure (paragraph [2]).

Explain why demerit goods are an example of market failure.

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

Using an externalities diagram, explain how the widespread use of solar panels will decrease the negative externalities of consumption caused by the use of kerosene lamps (paragraph [5]).

Using an externalities diagram, explain how the Chinese infrastructure projects have caused negative externalities (paragraph [6]).

Using an appropriate externalities diagram, explain why a government might decide to impose a price floor on a demerit good.

Discuss the view that imposing an indirect tax on gasoline (petrol) is the most effective way of reducing the market failure caused by cars.

Using an externalities diagram, explain why the garment industry is a source of market failure (paragraph [8]).