Theme One Case Studies

Question 1

Free market economy

Answer 1

Hing kong ranked most economically free market

Low tax rates
Relaxed regulations on business
Highly capitalist economic system

Question 2

Case study command economy

Answer 2

Countries with east economic freedom include
North Korea
Venezuela
Cuba
Congo
Eretria

They have low inequality
Suffer from food shortages, inflation, corruptions and high unemployment

Question 3

Negative production externality

Answer 3

In 2010 BP spilled over 35,000 barrels of oil in the Gulf of Mexico.
Damaged the shorelines of the Gulf states
More than 700 million lost in fishing and tourism revenues

Question 4

Negative consumption externality

Answer 4

Passive smoking
Can lead to king cancer and heart disease
High healthcare expenditure

Question 5

Positive production externality

Answer 5

Gov Spending on public transport benefits the wider community
Improves connection
Addresses geographical immobility
Access to a wider range of jobs

Question 6

Positive production externalities

Answer 6

Spending on healthcare
Boost productivity of labour force

Question 7

Positive consumption externality

Answer 7

Spending on education
An extra year of education associated with over 18% higher GDP per capita
Better educated population acts as a trigger for innovation, adoption of new technologies and enhanced growth

Question 8

Taxes on demerit goods

Answer 8

Excise duties on tobacco, petrol and alcohol
Economists found a 1% increase in the price of tobacco leads to a 0.5% fall in its demand
Tobacco tax has raised gov revenue by £8.8 bn

Question 9

VAT

Answer 9

In 2017 gov collected £125 by from it
Regressive tax as more you own lower proportion of income paid in VAT
Hurts the poor more than the rich

Question 10

Sugar tax

Answer 10

Introduced April 2018
Expected to raise 240m in a year
Reduced consumption of sugary drinks by 30%

Question 11

Subsdidiy scheme - solar power

Answer 11

Had the scheme until 2018
Helped 800,000 households and 28,000 businesses to install solar energy panels
Increased percentage of electricity generated from solar to 10%

Question 12

Minimum price on alcohol

Answer 12

Introduced in Scotland
50p per unit of alcohol
Targeted at raising prices of cheap beverages sold in super markets and off licences
Volume of alcohol sold in Scotland fell by three percent from 2017 to 2018

Question 13

German rent controls

Answer 13

Amount landlords cab charge in rent is regulated by the gov
Criticisms involved it would deter investment resulting in shortages and shabbier properties

Question 14

Maximum price on bread

Answer 14

Some developing countries have maximum prices on bread
Eg Venezuela
Has led to larger significant shortages

Question 15

Reducing obesity Uk

Answer 15

Forcing resteraunts to put calories on the menus
School dinner standards

Question 16

Uk encourage to cycle

Answer 16

Improve cycle infrastructure across the country
Has health, social and economic benefits including reducing pollution and journey times