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The number of individual weekly ticket sales from UK National Lottery games operated by Camelot was 73 million in the financial year 2015–2016 - Edexcel - A-Level Economics A - Question 2 - 2018 - Paper 1
Question 2
The number of individual weekly ticket sales from UK National Lottery games operated by Camelot was 73 million in the financial year 2015–2016. The sale price of ea... show full transcript
Worked Solution & Example Answer:The number of individual weekly ticket sales from UK National Lottery games operated by Camelot was 73 million in the financial year 2015–2016 - Edexcel - A-Level Economics A - Question 2 - 2018 - Paper 1
Step 1
(a) Calculate the weekly revenue received by Camelot after paying the tax to the government.
Answer
To calculate the weekly revenue received by Camelot after tax, we start with the total revenue generated from ticket sales. The sale price of each ticket is £2, and with 73 million tickets sold per week, the gross revenue can be calculated as:
Next, we need to account for the 24 pence tax on each ticket. This means that the tax revenue is:
Thus, the revenue received by Camelot after paying the tax is:
So, the answer is £128.48 million.
Step 2
(b) Explain the likely impact of the price increase of national lottery tickets on the demand for using gaming machines.
Answer
The price increase from £1 to £2 for national lottery tickets is likely to have an impact on the demand for using gaming machines, which are considered substitutes for lottery tickets. As the price of the lottery ticket increases, the demand for alternatives may rise. The cross elasticity of demand estimated at 1.28 indicates that the demand for gaming machines is quite responsive to changes in the price of lottery tickets.
Thus, it is likely that the demand for gaming machines will increase significantly due to this price hike, as consumers may seek out these substitutes in response to the higher cost of purchasing national lottery tickets.
Step 3
(c) The most likely reason for this grant is to ensure the:
Answer
The most likely reason for the £30 million grant from the National Lottery for the flood defence scheme at Broomhill Sands is to ensure that public safety is prioritized and to protect local communities from flooding. This initiative is beneficial as it safeguards homes and businesses, thereby enhancing overall community welfare.