Economics 9708 · AS & A Level · Behavioural economics

Behavioural economics — practice question

(a)[12]

In 2009, severe fires in Australia destroyed a great deal of property and countryside. The government pledged to devote a large amount of money and resources to help restore the area. Using diagrams, explain what is meant by efficiency in the use of resources.

(b)[13]

In 2009, severe fires in Australia destroyed a great deal of property and countryside. The government promised to set aside a large amount of money and resources to support the area’s restoration. Discuss the economic implications of the government’s approach to the situation.

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