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]

Q: What topic does this question test?

This question tests Market Failure and Government Intervention in A-Level Economics (syllabus code 9708). It is worth 1 mark.

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.

✓ Correct Answer

The correct answer is C: If undertaken by the public sector there would be a net social benefit of $15 million.

📋 Examiner Report & Trap Analysis

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...

🎯 Mark Scheme Breakdown

Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.

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About This A-Level Economics Question

Topic

This multiple-choice question tests Market Failure and Government Intervention in A-Level Economics (syllabus code 9708). It is worth 1 mark.

Source

This question appeared in the Cambridge A-Level Economics Oct/Nov 2015 examination, Paper 1 Variant 2.

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