Hi all,
Finding the mark scheme of the 18 marker a bit confusing and am just looking for a bit of clarification. Am I right in saying that you don't need to refer to the case study for starters? Here is the way I structured it:
Definition of a subsidy, what it does (increase consumption of merit goods etc) and drew a diagram to illustrate it.
Drawbacks of using a subsidy e.g. losing quality or firms not passing down costs in form of lower prices.
Posing the idea of subsidies not being the best solution to other forms of market failure e.g. information failure. I suggested bans and regulations here however didn't go into more depth I simply made it known that there are other forms of market failure for which other policies could be better.
Concluded ultimately saying that Subsidies can be useful in correcting market failure however it depends on the extent and type of market failure that has occured.
The main thing that is worrying me is that I didn't go into detail of how alternate policies work and why they are better.
Any thoughts are very much appreciated.