A-Level Economics Model Answers
Evaluate the economic case for and against the government subsidising rail fares. (25 marks)
Here is a question and answer from the markets and market failure section of the A-level Economics syllabus.
This question is an ‘evaluate’ question - the type of question students need to practice their exam technique. In some exam boards, this is the ‘25 marker’.
I have seen so many capable students drop a few marks on these sorts of questions simply because they do not evaluate the scenario with enough scope.
THE FREE ESSAY PLAN BELOW CAN BE USED AS A GUIDE TO HELP YOU WRITE YOUR RESPONSE.
Need more help?
Book a trial lesson and boost your grades
Evaluate the economic case for and against the government subsidising rail fares (25 marks)
The question asks you to evaluate for and against the government intervening by way of subsidy. You will first start by defining a few things and applying your knowledge to the context of rail travel. You will then proceed to making a case for and against the subsidisation of rail fares. This will then be followed by a conclusion.
FREE Model Answer Guide
Possible Definitions
Market failure
Market failure occurs when the free market mechanism fails to allocate resources efficiently. In these circumstances, the government may choose to intervene in order to restore social welfare.
Government Intervention
One way the government can intervene is by subsidisation. This is when the government makes a payment to a firm, usually in order to promote production/consumption of the good/service provided.
The Argument (For and Against)
Case for government subsidies applied to rail fares
Apply the theory of subsidy intervention to the market for rail
Draw a supply/demand diagram to illustrate this
Why would a government want to subsidise rail fares? (Reason 1)
Why would a government want to subsidise rail fares? (Reason 2)
Case against government subsidies applied to rail fares
What might a downside of rail fare subsidies be?
How can cost benefit analysis help the government avoid government failure?
Could cost benefit analysis be wrong?
Could the government intervene in a more efficient way, other than subsidies?
Conclusion
Should the government subsidise rail fares?
Weigh up your responses to the above and evaluate
Diagrams you could use
An applied demand/supply diagram
Subsidy diagram
Want the full model answer?
10 Past Papers with Model Answers on Market Failure
Written by an experienced Economics tutor
Full model answers with diagrams
Suitable for all UK Economics exam boards
Physical booklet
£20.00
All orders will be delivered within 1-2 weeks.