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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
Calculate the weekly revenue received by Camelot after paying the tax to the government.
Answer
To determine the weekly revenue received by Camelot after tax, we first need to find the total revenue generated from ticket sales:
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Total Ticket Revenue:
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Tax Revenue: The tax on each ticket is 24 pence, or £0.24, hence:
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Net Revenue after Tax: To find the revenue after paying the tax, we subtract the tax revenue from the total ticket revenue:
Therefore, the weekly revenue received by Camelot after paying the tax is approximately £128.48 million.
Step 2
Explain the likely impact of the price increase of national lottery tickets on the demand for using gaming machines.
Answer
The price increase of national lottery tickets from £1 to £2 is likely to impact the demand for gaming machines in the following ways:
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Substitutability: Since gaming machines are considered substitutes for national lottery tickets, an increase in the price of lottery tickets may lead to an increase in demand for gaming machines as consumers seek more affordable entertainment options.
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Cross Elasticity of Demand: Given the cross elasticity of demand of 1.28, it suggests that a 1% increase in the price of national lottery tickets leads to a 1.28% increase in the demand for gaming machines. Hence, if lottery ticket prices rise significantly, the demand for gaming machines is anticipated to rise as well.
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Market Trends: If consumers perceive gaming machines as a more cost-effective or value-driven alternative due to the price hike in lottery tickets, this could support a shift in spending behavior towards gaming machines.
Step 3
The most likely reason for this grant is to ensure the:
Answer
In relation to the coastal flood defence scheme at Broomhill Sands, the most likely reason for the grant from the National Lottery is to ensure:
C) provision of a public good.
This is because flood defence schemes play a crucial role in protecting communities, property, and businesses from flooding, making them an essential public good that benefits society as a whole. The other options provided do not accurately reflect the nature of the funding or its intended purpose.