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Unit 3 · Government microeconomic intervention

Unit 3 essay review checklist

Every piece of knowledge, every analysis chain and every evaluation point that the 26 Unit 3 Paper 2 essay questions in the bank (2022–2025) ask for. Tick an item only when you can explain it from memory, out loud or on paper, without looking.

清单条目使用英文,也就是考试作答所用的语言。标题、按钮和说明仍为中文。

0 / 107 ticked

How to use this checklist
  1. Cover the page and try each item out loud or on paper. Tick it only when you got it right without looking.
  2. Items with a diagram: draw it yourself first, then open it to compare.
  3. Use the 'Asked in' links to open the real questions that need an item, and write one of them.
  4. Work on the items you cannot tick first. 'Hide ticked' shows only those.
  5. Before a test, print the checklist and go through it again on paper.

3.1Reasons for government intervention in markets

Chapter 12 notes → · No essay in the bank is set on this section ·

No essay in the bank is set on 3.1 directly. You still need it: every Unit 3 essay on a tax, a subsidy, a price control or free provision starts from why the government is intervening, and the merit and demerit good essays in 3.2 are built on these definitions.

Knowledge and understanding (AO1)

Analysis: the chains (AO2)

Evaluation (AO3)

3.2Methods and effects of government intervention in markets

Chapter 13 notes → · 21 essays set on this section ·

Most essays here ask whether one method is the best, always works or is justified. Learn each method with its diagram, then the limits that let you compare it with another. One essay filed here (on macroeconomic intervention) is really Unit 5 content; the Unit 5 checklist covers those policies in full.

The 21 past-paper questions on this section
  1. 9708/24/M/J/25 (b) Assess whether a minimum wage policy is the best way to redistribute income in an economy. [12]
  2. 9708/24/M/J/25 (b) Assess whether governments should always support the provision of merit goods in markets such as those for education or health care. [12]
  3. 9708/23/M/J/25 (b) Assess whether a charge made for healthcare at the point of use is likely to be more beneficial to consumers and providers than if healthcare is available to all free of charge. [12]
  4. 9708/21/M/J/25 (b) Assess whether an increase in the tax on a demerit good is always the best way to reduce the consumption of such a product. [12]
  5. 9708/22/F/M/25 (b)Assess the extent to which a subsidy is likely to be the best method to increase the consumption of a merit good. [12]
  6. 9708/23/O/N/25 (b) Assess the ways in which producers of root ginger might be able to stabilise their incomes. [12]
  7. 9708/24/O/N/25 (a) Explain what is meant by the incidence of an indirect tax and consider the extent to which it is possible for the incidence to pass from a producer of a good to a consumer of that good. [8]
  8. 9708/24/O/N/25 (b) Assess the extent to which a government should subsidise the production of merit goods to increase the consumption of these goods. [12]
  9. 9708/23/O/N/24 (b)Assess whether the expected benefits of providing healthcare services free of charge at the point of use exceed the likely costs. [12]
  10. 9708/22/M/J/24 (b) Assess whether fixing a minimum price is likely to be the best policy to reduce the consumption of a demerit good. [12]
  11. 9708/22/O/N/24 (a) With the help of examples, explain the difference between the marginal rate of taxation and the average rate of taxation and consider whether a government should decide to increase the rate of indirect tax to raise additional revenue. [8]
  12. 9708/22/F/M/24 (a) With the help of a demand and supply diagram, explain how the introduction of an indirect tax affects equilibrium in a market and consider the extent to which the incidence of the tax will fall on the consumer. [8]
  13. 9708/23/M/J/23 (b) Assess the effectiveness of government intervention through buffer stock schemes in agricultural markets. [12]
  14. 9708/23/O/N/23 (b) Assess whether bus and local rail systems in cities should receive substantial subsidies from governments. [12]
  15. 9708/21/O/N/23 (b) Governments sometimes fix maximum prices on goods for different reasons. Assess whether the use of a maximum price is always advantageous. [12]
  16. 9708/22/M/J/23 (a) A government wishes to keep the price of an essential food, such as rice, affordable to help low income households. Assess whether a policy of fixing the maximum price for an essential food is likely to be more effective than a policy of making transfer payments to low-income households. [12]
  17. 9708/22/F/M/23 (b) With the help of a diagram, assess whether the introduction of a minimum price in a market can be justified. [12]
  18. 9708/23/M/J/23 (b) Assess how governments use macroeconomic intervention to achieve their macroeconomic objectives. [12]
  19. 9708/23/M/J/23 (a) Explain why government intervention may be required to provide merit goods and consider why such intervention may not always be successful. [8]
  20. 9708/21/M/J/23 (b) With the help of a diagram, assess whether the benefits of a buffer stock scheme for an agricultural product always outweigh its disadvantages. [12]
  21. 9708/23/O/N/22 (b) Discuss the extent to which the introduction of a maximum price in a market will benefit consumers. [12]

Knowledge and understanding (AO1)

Analysis: the chains (AO2)

Evaluation (AO3)

  • Also asked in · Unit 1 22/M/J/25 (b) 22/O/N/19 (b) 23/M/J/19 (b)
  • Also asked in · Unit 1 22/O/N/19 (b)
  • Also asked in · Unit 1 22/O/N/19 (b) 23/M/J/19 (b)
  • Also asked in · Unit 1 22/M/J/25 (b) 22/M/J/17 (b) 23/M/J/19 (b)
  • Also asked in · Unit 1 22/M/J/17 (b) 23/M/J/19 (b)
  • Asked in 23/O/N/23 (b)
  • Also asked in · Unit 1 23/M/J/25 (a)
  • Asked in 22/M/J/23 (a)
  • Asked in 23/M/J/23 (b)
  • Asked in 23/O/N/25 (b)
  • Asked in 23/M/J/23 (b)

3.3Addressing income and wealth inequality

Chapter 14 notes → · 5 essays set on this section ·

The 5 past-paper questions on this section
  1. 9708/23/O/N/25 (a) The Gini coefficient for South Korea was estimated to be 0.39 in 2019 and 0.33 in 2022. Explain what this data means, how it might be used by the government of South Korea and consider its usefulness. [8]
  2. 9708/23/O/N/25 (b) Assess why it is easier for a government such as that of South Korea to redistribute income rather than redistribute wealth. [12]
  3. 9708/23/O/N/24 (b) Assess which policies are likely to be most effective in redistributing income. [12]
  4. 9708/22/M/J/24 (b) Assess the extent to which government policies to redistribute income and wealth are likely to be successful. [12]
  5. 9708/22/F/M/23 (a) Explain the possible economic reasons for inequality of income and consider whether inequality of income can benefit an economy. [8]

Knowledge and understanding (AO1)

Analysis: the chains (AO2)

  • Asked in 22/F/M/23 (a)
  • Show the diagram
    Quantity of Labour WageDʟSʟWₘᵢₙQdQsUnemployment
    Price Floor (Min Wage) · Open the diagram sheet
  • Asked in 23/O/N/25 (a)
  • Asked in 23/O/N/25 (b)

Evaluation (AO3)

  • Asked in 23/O/N/25 (a)
  • Asked in 22/F/M/23 (a)
  • Asked in 23/O/N/25 (b)

Evaluation toolkit and exam technique

These work across the whole unit. Almost every Unit 3 essay asks whether an intervention is the best, always works or will succeed, and most evaluation marks come from one of these moves applied to the policy in front of you.

Evaluation (AO3)

Exam technique

Model chains and evaluation points for each item are being added. Until then, check yourself against the chapter notes and the mark scheme for each question.

This is a free, unofficial Cambridge 9708 Economics revision resource and is not affiliated with Cambridge Assessment International Education.