Example Bank

Question 1

What is an example of a negative consumption externality?

Answer 1

Smoking Cigarettes.

Question 2

What is the annual cost to the NHS of smoking?

Answer 2

£2-6 Billion.

Question 3

What is the overall cost to the Taxpayer of Smoking Cigarettes?

Answer 3

£14 Billion.

Question 4

What is the annual cost to the NHS of Drinking Alcohol?

Answer 4

£3.5 Billion.

Question 5

What is the cost to the economy of drinking alcohol?

Answer 5

£52 Billion.

Question 6

What is the cost of firms causing air pollution?

Answer 6

£42 Million annual health and social care costs.

Question 7

How much does exercise save the NHS per person per year?

Answer 7

£100.

Question 8

How else does exercise help the NHS?

Answer 8

Employer benefits of greater productivity and lower absenteeism.

Question 9

What is an example of a public good?

Answer 9

Flood defences.

Question 10

How are flood defences non-rival and non-excludable?

Answer 10

No price can be charged for them, they don’t diminish in quantity upon consumption.

Question 11

What is an example of a Quasi-Public good?

Answer 11

Beaches.

Question 12

How are beaches an example of a Quasi Public good?

Answer 12

They can become excludable if they’re owned by a hotel. Can become rival during peak times of congestion.

Question 13

What is an example of tragedy of the commons?

Answer 13

Deforestation in Kuala Lumpur.

Question 14

What is wrong with forests in Malaysia not being privately owned?

Answer 14

Malaysia has the fastest rate of deforestation of any country.

Question 15

How much forest coverage has Malaysia lost since 2000?

Answer 15

15%.

Question 16

What resource is found in Malaysia which is valuable?

Answer 16

Palm Oil.

Question 17

What does this result in?

Answer 17

Resource Depletion.

Question 18

What is an example of indirect tax and market failure?

Answer 18

Sugar Tax.

Question 19

How much was spent on the direct medical costs of government spending?

Answer 19

£16 Billion per year.

Question 20

What % of children are obese or overweight?

Answer 20

1/3.

Question 21

What was the tax rate for drinks with low sugar content?

Answer 21

18p per litre.

Question 22

What was the tax rate for drinks with high sugar content?

Answer 22

24p per litre.

Question 23

What was the impact of the sugar tax for companies?

Answer 23

50% of companies changed their recipes to reduce sugar volumes.

Question 24

How much was sugar content reduced by in drinks?

Answer 24

28.8%.

Question 25

What was the impact for government?

Answer 25

It raised £240 million in its’ first year, which was used to fund sports in primary schools.

Question 26

Why is the sugar tax regressive?

Answer 26

They affect low income families, as they spend a higher proportion of their income on beverages and foodstuffs.

Question 27

What was elasticity like for poorer households?

Answer 27

Lower income households had higher elasticity of demand.

Question 28

What was the justification for the regressive nature?

Answer 28

Tax will result in a greater decrease in consumption.

Question 29

How can nudges be used to dissuade customers from buying sugary drinks?

Answer 29

Any decrease in quantity demanded of sugar due to a tax will be short term, and offset later.

Question 30

How was the sugar tax ineffective?

Answer 30

Not much was passed onto consumers, the producer payed a majority of the tax.

Question 31

What did the British soft drinks association claim about the tax?

Answer 31

It would cause 4000 job losses in the soft drinks industry.

Question 32

What is an example of Subsidies?

Answer 32

The US Government subsidises the corn industry.

Question 33

What has the subsidising of the corn industry led to?

Answer 33

Overproduction of corn, overusing fertilisers, soil erosion, water pollution.

Question 34

How has the subsidy led to a rise in obesity rates?

Answer 34

High fructose corn syrup has become a cheap sweetener alternative.