A-LevelEconomicsThe price system and the microeconomy9708/32 · May/June 2020 · Q11 Mark

What is an example of a negative externality? A Lower profit due to increased competition from new firms entering the market. B Reduced government funding for a museum. C The increase in noise levels from aircraft due to the expansion of a large city airport. D The increase in production costs due to an increase in the cost of importing raw materials.

(a)What is an example of a negative externality? A Lower profit due to increased competition from new firms entering the market. B Reduced government funding for a museum. C The increase in noise levels from aircraft due to the expansion of a large city airport. D The increase in production costs due to an increase in the cost of importing raw materials.[1]

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, May/June 2020 Paper 3 Variant 2, question 1.

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