AO2 context points

Question 1

What is the estimated cost of air pollution to the UK NHS per year?

Answer 1

£20 billion/year – negative externality of production (pollution)

Question 2

How much does traffic congestion cost the UK economy annually?

Answer 2

Around £8 billion/year in lost productivity – negative externality. (ULEZ is an honourable mention)

Question 3

How much tax does the UK raise from cigarettes annually, and how much does smoking cost the NHS?

Answer 3

£12 billion raised, £2.4 billion NHS cost – demerit good with taxation used to internalise externality.

Question 4

How much did the UK spend on Covid-19 vaccinations, and what was the benefit?

Answer 4

£5 billion spent; over 100,000 lives saved – merit good with positive externalities.

Question 5

What is the average extra annual income of a UK graduate?

Answer 5

Around £10,000 more per year than a non-graduate – shows long-term benefits of merit goods (education).

Question 6

How much does childcare cost on average in the UK, and what percentage of parents report finding it unaffordable?

Answer 6

Average childcare costs in the UK are £258 per week for a child under 2 (Family and Childcare Trust, 2023), and one in four parents report finding it unaffordable.

Question 7

What is the UK National Living Wage for adults aged 23 and over in 2024?

Answer 7

£11.44 per hour – a government-set wage floor to address inequality.

Question 8

How many UK workers earn less than the Real Living Wage?

Answer 8

Over 5 million workers – indicating a high level of income inequality and underpayment (Living Wage Foundation, 2023)

Question 9

How many children are affected by food insecurity in the UK?

Answer 9

1 in 5 children in the UK live in food insecure households (The Food Foundation, 2023).

Question 10

How much have carbon emissions been reduced in the EU Emissions Trading Scheme (ETS) since its introduction in 2005?

Answer 10

The EU ETS has helped reduce emissions by 42.8% in covered sectors from 2005 to 2022 (European Commission, 2023).

Question 11

What percentage of global land is privately owned, which allows for clear property rights and market solutions?

Answer 11

Over 70% of global land is privately owned, which facilitates resource management and property rights (World Bank, 2023).