Economics 0455 · IGCSE · Market failure

Market failure — practice question

Developers are planning to expand a large retail shopping district in a city. It is believed that this proposal would generate hundreds of jobs, bring profits for the shops, but also lead to serious traffic congestion. What economic concepts are directly involved in this statement?

  • Aexternal cost and private benefit
  • Bincome distribution and inelastic demand
  • Cprivate investment and a decrease in supply
  • Dsocial benefit and perfect competition

Worked solution & mark scheme

This 1-mark question has a full step-by-step worked solution and mark scheme.

  • Full mark scheme, point by point
  • Step-by-step worked solution
  • Write your answer & get it marked instantly by AI