market failure stats and questions

• What percentage of 10 and 11-year-olds in the UK are obese?

  20%
• How much does the NHS spend annually on obesity-related illnesses?

  £16 billion
• The sugar tax in Mexico reduced sales of sugary drinks by 12%
• What is the annual cost to the NHS of treating smoking-related illnesses?

  £3-6 billion
• The price elasticity of demand for cigarettes is highly elastic.

  False
• The total cost to society of alcohol misuse is £21 billion annually, including costs to the NHS, police, and local councils
• What is the price elasticity of demand for beer?

  -2.3 to -0.7
• Wine and spirits have more price elastic demand than beer.
• The annual cost to society of gambling is £1.2 billion
• How much does road congestion cost the UK economy annually?

  £20 billion
• Air pollution in the UK is less likely to cause death than in Sweden.

  False
• The UK is two times more likely than the U.S. to have deaths caused by air pollution.
• What type of good is public transport in terms of market failure?

  Merit good
• Education is a state-provided merit good in the UK.
• How much does the UK government spend annually on education?

  £80 billion
• The NHS accounts for approximately two-sevenths of all government spending in the UK.
• What type of supply curve characterizes state-provided healthcare in the UK?

  Perfectly inelastic
• Excess demand for healthcare in the UK could be addressed by reducing demand through digital health solutions.
• Why are museums heavily subsidized by the government?

  To generate positive externalities
• Fruits and vegetables are considered merit goods because their consumption is encouraged by the five-a-day campaign.
• What change did Theresa May propose regarding universal free school lunches in the UK?

  Provide free breakfast
• Recycling generates positive externalities in its consumption.
• Flood defenses are considered public goods because private firms have no incentive to provide them due to a lack of profit.
• What happened in Leeds and Yorkshire related to flood defenses a few years ago?

  Major flooding occurred
• Affordable housing in the UK is a primary example of factor immobility.
• What type of market failure is addressed by flood defenses?

  Public good
• Flood defenses in Leeds and Yorkshire faced issues due to insufficient funding
• Income inequality is a source of market failure in the housing market.
• What policy aims to help first-time buyers in the UK housing market?

  Help to Buy scheme
• An increase in stamp duty for second homes aims to reduce demand by making them more expensive
• The UK housing market is currently facing a housing crisis.
• What is the easiest type of market failure essay structure discussed?

  Effectiveness of one policy
• Indirect taxes can generate government revenue
• Inelastic demand is a limitation of indirect taxes as a policy to reduce obesity.
• What is a non-market-based approach to solving market failure?

  Regulation
• Enforcing regulations can be costly due to the need for policing
• Information provision is a short-term solution to market failure.

  False
• Order the steps for structuring an essay discussing multiple policies to solve market failure.

  1️⃣ Introduce the first policy

  2️⃣ Discuss its limitations

  3️⃣ Introduce a second policy

  4️⃣ Discuss how it overcomes the first policy's limitations

  5️⃣ Discuss the second policy's limitations

  6️⃣ Introduce a third policy
• Why might the government intervene in a market with a welfare loss?

  To improve welfare
• Government failure occurs when intervention worsens market outcomes