Economics 0455 · IGCSE · Market failure

Market failure — practice question

The United Nations’ World Tourism Organisation has estimated that, by 2020, only 7% of the world’s population will have visited another country. If international travel rises, it may generate jobs and affect incomes. However, it would also place strain on finite resources and produce external costs.
(a)[2]

State what is meant by ‘resources’.

(b)[4]

Explain in what way international travel may generate external costs.

(c)[6]

Analyse the ways in which an increase in international travel may affect incomes.

(d)[8]

Discuss whether demand for international travel is likely to keep rising.

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: The factors of production / inputs

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