CAIE A Level Topical Past Paper 4
7.3 Efficiency and market failure
9708/42/O/N/25
Traffic congestion is a cause of allocative inefficiency.
Evaluate, with the help of diagram(s) two policies that a government may introduce to reduce the problem of allocative inefficiency caused by traffic congestion. [20]
9708/41/O/N/25
Market failure is to blame for climate change and the inefficient allocation of resources. The only solution is for governments to intervene to improve resource allocation.
Assess the extent to which you agree with this statement. [20]
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With the help of a diagram, consider whether economic efficiency can be achieved without government intervention in a market economy. [20]
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Evaluate the perspective that privatisation consistently enhances the allocation of resources within a country. [20]
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The use of air travels leads to market failure caused by negative externalities.
With the help of a diagram, assess the extent to which a government can intervene to correct this market failure. [20]
9708/43/O/N/22
Pareto optimality can only be achieved when an economy is both productively and allocatively efficient. This will create a more equitable society.
b) Discuss the extent to which you agree with this statement. [13]
9708/42/F/M/22
a) Explain what is meant by dynamic efficiency and consider which type of market structure is most likely to achieve dynamic efficiency. [12]
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a) Explain what economists mean by a public good and discuss why the provision of such a good is associated with market failure. [12]
9708/42/M/J/21
a) What is meant by ‘efficiency’ in relation to the use of resources? [12]