SECTION B Answer any ONE of the following essay questions from the THREE set as completely as possible. These questions are intended to be full essay questions. This section is worth 40% of the total marks for the paper. Marks will be awarded for correctly labelled diagrams where appropriate. Each full question is worth 40 marks. 1. Market failure is said to occur when there is an inefficient allocation of resources in a free market or where market forces cause a loss of net social welfare. Using at least TWO examples from different areas of market failure explain why this is the case. (40 marks) 2. Discuss the limitations of the Rational Consumer Choice model including the contributions to the debate made by Veblen and Galbraith. In your answer you might also consider the contribution of behavioural economics to the discussion. (40 marks)