AS Economics essay help. Watch

georget1
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Please help with this AS economic question (AQA):

"The extract suggests that public goods such as flood defences have to be paid for by somebody"
"Evaluate the view that the provision and maintenance of flood defences should be paid for solely by the government"
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Psychotic546
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(Original post by georget1)
Please help with this AS economic question (AQA):

"The extract suggests that public goods such as flood defences have to be paid for by somebody"
"Evaluate the view that the provision and maintenance of flood defences should be paid for solely by the government"
I did this a while ago.
I said that it shouldn't and then looked at the ways that they could pay for it (and who should):

Unfair all taxpayers pay for it (opportunity cost involved)
The house builders should be taxed when building homes in flood risk areas and so should farmers since they lead to the problem. The tax revenues can help build the defences and will mean less flood risk housing (suitable graph for this)

In the evaluation I pointed out that all taxpayers benefit since a flooded town would be a much bigger problem (positive externality graph) and also that farmers have so little profit that maybe they shouldn't be taxed.
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georget1
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(Original post by Psychotic546)
I did this a while ago.
I said that it shouldn't and then looked at the ways that they could pay for it (and who should):

Unfair all taxpayers pay for it (opportunity cost involved)
The house builders should be taxed when building homes in flood risk areas and so should farmers since they lead to the problem. The tax revenues can help build the defences and will mean less flood risk housing (suitable graph for this)

In the evaluation I pointed out that all taxpayers benefit since a flooded town would be a much bigger problem (positive externality graph) and also that farmers have so little profit that maybe they shouldn't be taxed.
when you say suitable graph do you mean the effect of tax imposition ie shift of demand curve to the left (decrease)?

And why do you need a positive externality graph - flooding is a negative externality. Or do you mean the flood defences will act as a positive externality?
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Psychotic546
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(Original post by georget1)
when you say suitable graph do you mean the effect of tax imposition ie shift of demand curve to the left (decrease)?

And why do you need a positive externality graph - flooding is a negative externality. Or do you mean the flood defences will act as a positive externality?
Yeah shift of demand.
And the positive externality cause it shows that having it benefits society.
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