0455.2.10.1 — definition of market failure The key terms associated with market failure: public good, merit good, demerit good, social benefits, external : past paper questions
Real questions on 0455.2.10.1 — definition of market failure the key terms associated with market failure: public good, merit good, demerit good, social benefits, external
The newest 20 of 39 written questions. Open one to see it on the real paper.
- 0455/23 · May/June 2026 · Q5b[4]
Explain two examples of market failure that may occur in an economy.
See it on the paper → - 0455/22 · February/March 2026 · Q5a[2]
Define ‘public good’.
See it on the paper → - 0455/21 · May/June 2025 · Q1c[2]
Explain what effect an increase in tourism may have on Gabon’s current account of the balance of payments.
See it on the paper → - 0455/11 · October/November 2024 · Q9[1]
How would this affect the private cost of transport?
See it on the paper → - 0455/12 · October/November 2024 · Q9[1]
What would be an external cost of this decision?
See it on the paper → - 0455/21 · October/November 2024 · Q4c[6]
Analyse possible reasons why a government may want to intervene in a market.
See it on the paper → - 0455/11 · May/June 2024 · Q9[1]
What is a correct definition of a demerit good?
See it on the paper → - 0455/22 · February/March 2024 · Q3d[8]
Discuss whether or not a government should provide free fruit to consumers.
See it on the paper → - 0455/22 · February/March 2024 · Q5b[4]
Explain two reasons why a government may discourage cigarette smoking.
See it on the paper → - 0455/12 · October/November 2023 · Q1[1]
Which statement is correct?
See it on the paper → - 0455/23 · October/November 2023 · Q3d[8]
Discuss whether or not a ban on cars in a city will benefit the city’s households and firms.
See it on the paper → - 0455/23 · October/November 2023 · Q5b[4]
Explain two ways a government could intervene to reduce market failure.
See it on the paper → - 0455/21 · May/June 2023 · Q4b[4]
with examples, the difference between a merit good and a public good.
See it on the paper → - 0455/23 · May/June 2023 · Q5b[4]
Explain, with examples, the difference between private benefits and external benefits.
See it on the paper → - 0455/22 · February/March 2023 · Q2c[6]
Analyse how a government could encourage the consumption of merit goods.
See it on the paper → - 0455/12 · October/November 2022 · Q8[1]
To reduce traffic congestion, a government decides to build a new road. There is a toll charge on the new road. What is the main purpose of this government intervention?
See it on the paper → - 0455/22 · October/November 2022 · Q4b[4]
why public goods would not be supplied in a market economic system.
See it on the paper → - 0455/22 · May/June 2022 · Q5b[4]
two ways a government could increase the consumption of merit goods.
See it on the paper → - 0455/11 · October/November 2021 · Q4[1]
When is production certain to harm society?
See it on the paper → - 0455/12 · October/November 2021 · Q4[1]
Which combination of characteristics describes a public good?
See it on the paper →
What examiners said
Comprehensive responses • Many candidates accurately defined public goods using the correct characteristics of non-rivalry and non-excludability. Limited responses • Some candidates incorrectly defined public goods as ‘goods provided by the government’. • Some candidates confused public goods with merit goods.
— Examiner report, February/March 2026, 0455/22 Q5(a) (Cambridge)
This question proved challenging for most candidates. The majority were able to confirm the direction of the international money flow generated by increased (inbound) tourism for Gabon, but did not refer to the increase in exports which was crucial in this question. Moreover, the majority of candidates simply stated a version of the idea that the current account of the balance of payments would in...
— Examiner report, May/June 2025, 0455/21 Q1(c) (Cambridge)
Nearly all candidates were able to explain that a merit good was beneficial and gave a correct example e.g. education. However, only a few were able to explain a public good. Many described it simply as a good provided by the government and gave an example of a public service. Few mentioned that it was non-rival or non-excludable good which private sectors would not provide and only a government w...
— Examiner report, May/June 2023, 0455/21 Q4(b) (Cambridge)
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