Economics 9708 · AS & A Level · Maximum and minimum prices

Maximum and minimum prices — practice question

(a)[3]
  • What overall trend is shown by UK real expenditure on alcohol bought in shops for off-premises consumption between 2008 quarter 1 and 2012 quarter 2? [1]
  • Explain how a change in one demand factor may have led to the change in weekly alcohol consumption for the ‘average for all age groups’ shown in Table 1. [2]
(b)[3]
  • Identify the age group that has shown the greatest change in average weekly alcohol consumption from 2006 to 2010. [1]
  • For the age group you have identified, explain one possible economic reason for the change in its average weekly alcohol consumption compared with the other age groups. [2]
(c)[4]

If the minimum price per unit were set at 50 pence rather than 45 pence, explain, with the aid of a diagram, how the higher price would affect consumer surplus in this market.

(d)[4]

Explain, with reference to the data, how crime and hospital admissions arising from excessive alcohol consumption contribute to social costs.

(e)[6]

Discuss whether the problems linked to excessive alcohol consumption are better tackled through a minimum price per unit for alcohol rather than through an education campaign.

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