CIE AS Topical Past Paper 2
3.2 Methods and effects of government intervention in markets
9708/22/M/J/24
a) With the help of an example each, explain the difference between a merit goods and a demerit goods and consider whether a subsidy given to a merit good will always be effective in increasing consumption. [8] [Sample essay]
b) Assess whether fixing a minimum price is likely to be the best policy to reduce the consumption of a demerit good. [12]
9708/22/F/M/24
a) With the help of a demand and supply diagram, explain how the introduction of an indirect tax affects equilibrium in a market and consider the extent to which the incidence of the tax will fall on the consumer. [8]
b) Assess whether the improved provision of information is likely to be the best method to reduce the consumption of demerit goods. [12] [Sample essay]
9708/23/O/N/23
a) Explain why the provision of bus and local rail (mass transit) services in cities is classified as a private good not a public good and consider why such services might only be provided by the private sector. [8]
b) Assess whether bus and local rail systems in cities should receive substantial subsidies from governments. [12]
9708/21/O/N/23
a) Explain why a government might decide to increase its direct provision of essential goods and services and consider whether such a policy is always likely to be successful. [8]
b) Governments sometimes fix maximum prices on goods for different reasons. Assess whether the use of a maximum price is always advantageous. [12]
9708/22/M/J/23
a) Assess whether maximum price or transfer payments are more effective to reduce price of food items. [12]
9708/22/F/M/23
b) With the help of a diagram, assess whether the introduction of a minimum price in a market can be justified. [12]
9708/23/O/N/22
b) Discuss the extent to which the introduction of a maximum price in a market will benefit consumers. [12]