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A-LevelEconomicsBasic economic ideas and resource allocation9708/12 · Oct/Nov 2022 · Q41 Mark

What is a normative statement?

Afirm receiving a government subsidy will increase the supply of a good.
BNegative externalities are the most serious market failure.
Crise in incomes will lead to a rise in demand for normal goods.
Drise in the additional rate of income tax will decrease the incentive to work.

✓ Correct answer

B: Negative externalities are the most serious market failure.

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About this question

Topic
Basic economic ideas and resource allocation, A-Level Economics (syllabus 9708). Multiple choice, 1 mark.
Source
A-Level Economics, Oct/Nov 2022 Paper 1 Variant 2, question 4.

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