Economic Environment Quiz
Test your knowledge of The Economic Environment with these A-Level Economics questions.
This quiz consists of 12 questions. Scroll down to start the quiz!
Questions
Why do environmental consequences of business behaviour often result in market failure?
Because they cause more social costs than social benefits
State at least two examples of external costs to the environment created in production of goods
Air pollution, Noise pollution, Water pollution, CO2 emissions, visual pollution
If there are negative externalities created in the production of a specific product is the price charged for the product likely to be higher or lower than it should be?
Lower
Give an example of an environmental good which is a pure public good
The sea, air
How do indirect taxes help to correct environmental market failure?
Indirect taxes help to increase the cost of the product therefore reducing demand
Are indirect taxes most effective for products with elastic or inelastic demand?
Products with inelastic demand
What is the aim of a pollution tax?
A pollution tax seeks to convert the external costs of pollution into a private cost therefore reducing the level of output to a socially equilibrium level
Why might pollution taxes lead to an inequality in resource allocation?
Because the increased prices may be most felt by the less wealthy
Why are economic growth and the environment in conflict?
Because an increase in production often leads to an increase in pollution and environmental damage
How can the government regulate markets to control environmental damage?
They can enforce planning and pollution restrictions
How do environmental objectives conflict with having a balance on the current account of the balance of payments?
Environmental factors can reduce the efficiency of domestic operations making exports more expensive than imports
To what extent do you agree with the statement "Government intervention to reduce CO2 emissions is more harmful to the UK economy than the emissions themselves". (15 marks)
Level 1
Doesn’t identify any issues. Shows little understanding of economics. Lacks evaluation and analysis. Question not answered adequately. Few, if any, relevant issues are recognised. Economic concepts and principles are
0 to 3 marks
Level 2
Identifies at least one issues. Uses basic economics to answer the question. Some identification of different points of view but evaluation is lacking or very basic. Answer lacks clear structure and fails to fully understand the question. or more relevant issues are recognised. Basic terminology may be used.
4 to 6 marks
Level 3
At least two issues identified. Economic concept and ideas are applied and understanding is demonstrated. Looks at alternative viewpoints and evaluates key issues / arguments. Uses key economic terms.
7 to 10 marks
Level 4
Shows a good understanding of economic concepts and models which are used to help answer the question. Demonstrates an understanding of different view points which enables evaluation of the issues and arguments. Conclusions are drawn.
11 to 13 marks
Level 5
Identifies at least three issues. Demonstrates a good understanding of economic models and concepts which are applied to help answer the question. Looks at alternative points of view. Uses theory to help evaluate key issues and support conclusions.
14 to 15 marks
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