Specification point 1.4.2 · Theme 1

Government failure

Government intervention · Introduction to markets and market failure

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19 questions

Essay questions

Long-form evaluation and discussion

12
A-level Paper 1, June 2025, Q7EssayEvaluate
Optional25 marks
ContextHigh Speed 2 (HS2) was a £100 billion UK government rail project designed to expand the existing network. The journey time between London and Manchester would take just 1 hour and 11 minutes, 54 minutes quicker than today’s fastest time. Almost 900 homes, 1 000 businesses and around 60 ancient woodlands would be destroyed by its construction.

Evaluate the likely microeconomic effects of building major infrastructure projects.

1.3.2 · Externalities1.4.1 · Government intervention in markets1.4.2 · Government failure3.5.1 · Demand for labour
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A-level Paper 1, June 2025, Q8EssayEvaluate
Optional25 marks
ContextIn 2023, the UK prime minister Rishi Sunak said that he wanted to see all students in England study some form of mathematics until they reach the age of 18 to ‘ensure that they leave school better equipped for the jobs of the future’. This would require additional spending on education. Just half of all 16 to 19 year-olds study mathematics. Yet in a world where data is everywhere and statistics are vital in every job, the workforce will require more analytical skills than ever before.

Evaluate the likely microeconomic effects of increased spending on education.

1.3.2 · Externalities1.4.1 · Government intervention in markets3.5.2 · Supply of labour1.4.2 · Government failure
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AS Paper 1, June 2025, Q6(f)EssayEvaluate
Optional20 marks

Case study · The market for meat and the growth of vegetarianism

Evaluate the likely microeconomic effects of a reduction in subsidies to farmers of animal products (Figure 1 and Extract B, line 14). Use a relevant diagram to support your answer.

Diagram needed. Open the original question paper for the diagram

1.2.9 · Indirect taxes and subsidies1.4.1 · Government intervention in markets1.4.2 · Government failure
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AS Paper 1, June 2024, Q6(g)EssayEvaluate
Optional20 marks

Case study · The market for plastic in the UK

Evaluate methods of government intervention which could be used to reduce the market failure associated with plastic waste. Use a diagram to support your answer.

Diagram needed. Open the original question paper for the diagram

1.4.1 · Government intervention in markets1.3.2 · Externalities1.4.2 · Government failure
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A-level Paper 1, June 2023, Q7EssayEvaluate
Optional25 marks
ContextThe average UK household energy bill (gas and electric combined) rose 80% from £1971 in 2021 to £3 549 in 2022.

Evaluate possible methods of government intervention to control household energy bills in the UK.

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1.4.1 · Government intervention in markets3.6.2 · The impact of government intervention1.4.2 · Government failure
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A-level Paper 1, June 2023, Q8EssayEvaluate
Optional25 marks
ContextUsing 2021 estimates of carbon emissions, it is estimated that a petrol car journey from London to Glasgow emits approximately 3.3 times more carbon dioxide per passenger than the equivalent journey by train.

Evaluate possible methods of government intervention to reduce carbon emissions caused by road transport in the UK.

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1.4.1 · Government intervention in markets1.3.2 · Externalities1.4.2 · Government failure
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AS Paper 1, June 2022, Q6(g)EssayEvaluate
Optional20 marks

Case study · The market for fish

Other than using a TAC, evaluate the policy options which could be used to reduce market failure resulting from over-fishing. Use at least one appropriate diagram in your answer.

Diagram needed. Open the original question paper for the diagram

1.4.1 · Government intervention in markets1.3.2 · Externalities1.4.2 · Government failure
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Data-response questions

Questions built around exam extracts

3
A-level Paper 1, June 2024, Q6(e)Data responseDiscuss
15 marks

Case study · The electronics industry

With reference to Extract D, discuss possible methods of government intervention to reduce electronic waste.

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1.4.1 · Government intervention in markets1.3.2 · Externalities1.4.2 · Government failure
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Short-answer questions

Focused calculations, explanations and diagrams

2
AS Paper 1, June 2022, Q2(c)Short answerExplain
2 marks
ContextThe Common Agricultural Policy (CAP) is a system of minimum prices and other programmes covering farming, environmental measures and rural development. The CAP applied to British farmers before the UK left the EU in January 2020.

Explain one likely problem for the EU of maintaining prices at P .

1.4.1 · Government intervention in markets1.4.2 · Government failure
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Multiple-choice questions

Quick checks of economic understanding

2
A-level Paper 1, June 2024, Q4(b)Multiple choice
1 mark
ContextIn 2022 the government announced that the maximum undergraduate tuition fee for universities in England will remain at £9 250 per year for the next two years.

Which one of the following is an example of government failure associated with the maximum price?

AContraction in demand
BDistortion of price signals
CExcess supply
DExtension in supply

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1.4.2 · Government failure1.4.1 · Government intervention in markets
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A-level Paper 1, November 2020, Q3(b)Multiple choice
1 mark
ContextThe EU tradable pollution permits scheme is expected to become more effective by 2020, due to recent reductions in the number of tradable pollution permits.

Regulation of firms that pollute is likely to be a problem because it

Aallows firms to use price signals
Bcreates unintended consequences
Cfills information gaps for businesses
Dmeans lower administrative costs

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1.4.2 · Government failure1.4.1 · Government intervention in markets
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