A-LevelEconomicsMarket Failure and Government InterventionOct/Nov 2015Paper 1 Q161 Mark
A cost-benefit analysis of a proposed underground railway produced the following statistics. annual costs and benefits $ million annual capital cost 10 operating and maintenance costs 3 fare revenue 6 savings to private travellers 5 savings to business 10 other economic benefits 7 What can be concluded from the statistics? [Table 16.1]
AIf undertaken by the private sector there would be a loss of $13 million.
BIf undertaken by the private sector there would be a profit of $3 million.
CIf undertaken by the public sector there would be a net social benefit of $15 million.
DIf undertaken by the public sector there would be a net social cost of $1 million.
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The correct answer is C. This question tests the candidate's understanding of market failure and government intervention within the Economicssyllabus. The examiner's mark scheme requires...
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Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
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