Market failure: past paper questions
Real questions on market failure
The newest 20 of 24 written questions. Open one to see it on the real paper.
- 2281/21 · May/June 2025 · Q1b[2]
Identify two external benefits of rainforests.
See it on the paper → - 2281/22 · October/November 2024 · Q4b[4]
Explain two external costs that may be caused by exploring for oil.
See it on the paper → - 2281/23 · 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 → - 2281/23 · October/November 2023 · Q5b[4]
Explain two ways a government could intervene to reduce market failure.
See it on the paper → - 2281/22 · October/November 2022 · Q5a[2]
Identify two methods of protection.
See it on the paper → - 2281/22 · October/November 2022 · Q5b[4]
Explain two reasons why a government may want to reduce imports.
See it on the paper → - 2281/23 · October/November 2022 · Q5c[6]
Analyse the reasons why a country may impose tariffs on imports.
See it on the paper → - 2281/22 · May/June 2022 · Q5b[4]
Explain two ways a government could increase the consumption of merit goods.
See it on the paper → - 2281/23 · October/November 2021 · Q1c[2]
Explain one external benefit that may arise from eating less meat.
See it on the paper → - 2281/23 · October/November 2021 · Q2d[8]
Discuss whether or not indirect taxation can reduce market failure.
See it on the paper → - 2281/21 · May/June 2021 · Q2a[2]
Identify the two types of costs that make up social cost.
See it on the paper → - 2281/21 · May/June 2021 · Q2c[6]
Analyse how cleaning up pollution could benefit an economy.
See it on the paper → - 2281/22 · May/June 2021 · Q1g[6]
Discuss whether or not Chilean consumers would benefit from more government intervention in the economy.
See it on the paper → - 2281/22 · May/June 2021 · Q2b[4]
Explain how frictional unemployment differs from cyclical unemployment.
See it on the paper → - 2281/22 · May/June 2021 · Q2c[6]
Analyse why the children of the rich tend to become rich adults.
See it on the paper → - 2281/22 · October/November 2020 · Q3c[6]
Analyse the effects on income distribution and tax revenue of an increase in indirect taxes.
See it on the paper → - 2281/22 · October/November 2020 · Q3d[8]
Discuss whether or not a government should impose a maximum price on food.
See it on the paper → - 2281/23 · October/November 2020 · Q2d[8]
Discuss whether or not government intervention will correct the market failure caused by a demerit good.
See it on the paper → - 2281/21 · May/June 2020 · Q5b[4]
Explain how a subsidy can correct market failure.
See it on the paper → - 2281/22 · May/June 2020 · Q2a[2]
Define external costs.
See it on the paper →
What examiners said
The effect of a ban on cars in a city was understood, to different degrees, by most candidates. Answers were stronger on the benefits of a ban e.g. reduced air pollution and improvement in quality of life in a city with car free zones. Stronger responses discussed more complex issues such as the quality and availability of public transport and other forms of transport e.g. bicycles. On issues wher...
— Examiner report, October/November 2023, 2281/23 Q3(d) (Cambridge)
Market failure is well understood by most candidates. Where it is not, it is usually confused with the failure of firms to make profits. Weak answers lacked specifics in the action taken by the government e.g. referring to placing a tax on goods but not stating an indirect tax on a demerit good. In other cases, candidates stated this successfully but did not then mention that the impact was to red...
— Examiner report, October/November 2023, 2281/23 Q5(b) (Cambridge)
Most candidates were able to identify two methods of protection, with the two most common examples given being tariffs and quota. A number of candidates gave vague answers. For example, some wrote ‘taxes’ without making clear what was being taxed.
— Examiner report, October/November 2022, 2281/22 Q5(a) (Cambridge)
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