A-LevelEconomicsThe price system and the microeconomy9708/33 · Oct/Nov 2019 · Q191 Mark
The government wants to regulate the consumption of a demerit good in order to increase society's net welfare. In which situation will society's net welfare increase? A The fall in the marginal social benefit is greater than the fall in the marginal social cost. B The fall in the marginal social cost is greater than the fall in the marginal social benefit. C The fall in the total social benefit is greater than the fall in the total social cost. D The fall in the total social cost is greater than the fall in the total social benefit.
- (a)The government wants to regulate the consumption of a demerit good in order to increase society's net welfare. In which situation will society's net welfare increase? A The fall in the marginal social benefit is greater than the fall in the marginal social cost. B The fall in the marginal social cost is greater than the fall in the marginal social benefit. C The fall in the total social benefit is greater than the fall in the total social cost. D The fall in the total social cost is greater than the fall in the total social benefit.[1]
Mark scheme
Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.
- [1] (Correct option is D)
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