Task
You work for a government of a European country that is considering making admission to museums of your country free to make them available to everybody.
You have decided to do better than just a general layman's explanation. Your report will be written simply, but using the language of economics. Before you commit to this policy, you study examples of other countries, including the UK.
Overall your report will be between 1200 and 1600 words long (this page contains 429 words), covering the following points but in a coherent report. Do not answer the questions in the style of an examination.
(i) Write a short, meaningful introduction into the topic.
(ii) Explain, using the example of museum visits, the economic functioning of the market, using terms including demand and supply, price mechanism, incentives, market equilibrium, equilibrium price and quantity.
(iii) Explain the demographic demand pattern for museum visits: Are certain groups of the population visiting museums more often than others?
(iv) Explain possible causes for and effects of shifts in demand and supply in this market.
(v) Explain, using the example of museum visits, own price, cross-price and income elasticity of demand; consider own price elasticity for various demographic groups. Use diagrams where applicable.
(vi) Explain all possible market failures in relation to museum visits.
(vii) Explain possible options for government intervention to correct such market failures. One of these options should be free admission.
(viii) Describe how such government intervention could affect demand for museum visits; discuss limitations, costs and benefits of the options for government intervention.
(ix) Based on above analysis, make recommendations to the government.
(x) Use appropriate sources for your analysis, including government, business and academic reports and journal articles, reliable news services, and excluding internet sources of uncertain or questionable origin.
(xi) Acknowledge all your sources fully and according to Harvard style.
(xii) Format your report appropriately and professionally with a title page, contents, page numbers, and clear tables and diagrams with titles, numbers and sources.