Practise scarcity, opportunity cost, factors of production, economic methodology, resource allocation, production possibility curves and classifications of goods.
What is essential to eliminate scarcity?
the existence of sufficient resources to meet all needs and wants
producers consistently produce in excess of demand
the government has a surplus budget
there is equilibrium in all markets
A
What is a common criticism of economics?
It fails to establish theories of economic behaviour.
It is unable to construct models of how an economy might work.
It lacks the ability to use and apply mathematics.
It is very difficult to undertake laboratory experiments in economics.
D
The nature of a typical car assembly plant has changed. The industry has fewer firms, operates on larger sites and has more automated machinery.
How is this change most likely to have affected the relative use of factors of production in the industry?
increased relative use
decreased relative use
capital and enterprise
labour and land
enterprise and labour
land and capital
labour and land
capital and enterprise
land and capital
enterprise and labour
D
With the use of examples, explain the difference between public goods and merit goods and consider whether markets will always provide enough of both goods.
Follow the point-based marking guidance at the top of this mark scheme and award:
up to 3 marks for AO1 Knowledge and understanding up to 3 marks for AO2 Analysis up to 2 marks for AO3 Evaluation.
AO1 Knowledge and Understanding (max 3 marks)
- For the use of accurate examples of BOTH merit goods and public goods (1).
- For clearly explaining the characteristics of public goods i.e., non-rivalry and non-excludable (1).
- For clearly explaining the characteristics of merit goods i.e., better than people realise and under consumed / underproduced due to information failure (1).
AO2 Analysis (max 3 marks)
- A market economy is less likely to produce enough of both goods due to the lack of a profit motive unless heavily subsidised.
- A mixed economy may produce enough due to government involvement and the welfare motive but may be constrained by limits on government spending.
Note: Analysis should consider at least 2 markets. If only 1 market is analysed, then 2 marks maximum for analysis and 0 for evaluation.
AO3 Evaluation (max 2 marks)
Offers a valid evaluation of whether enough of both types of good can be produced in at least 2 markets (1) reaching a valid conclusion (1).
AO1 Knowledge and understanding
AO2 Analysis
AO3 Evaluation
Assess whether a planned economic system should always switch to a mixed economy.
OR
Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table B: AO3 Evaluation to mark candidate responses to this question.
AO1 and AO2 out of 8 marks. AO3 out of 4 marks.
Indicative content
Responses may include:
AO1 Knowledge and understanding and AO2 Analysis
- Analysis of both the potential advantages and disadvantages of a planned economic system including the emphasis on welfare and provision of public and merit goods. However, the lack of competition may mean a lack of efficient allocation of goods etc.
- Analysis of both the potential advantages and disadvantages of a mixed economy including the fact that it possibly contains the best features of both a planned and a market economy, but this depends on how mixed it actually is. This may also include an assessment of the ease of the switch itself.
Level 1 responses will be assertive and lacking in explanations / mainly descriptive and/or or mainly lacking in relevance to the question.
Level 2 responses may contain some inaccuracies and will be one sided. Analysis will be explained at least in part and will be largely relevant to the question.
Level 3 responses will consider alternative policies / concepts etc. and will be balanced. Explanations of points raised will be offered and will be accurate and relevant to the question.
AO3 Evaluation
- For an evaluation of both the advantages and disadvantages of planned and mixed economies leading to:
- A valid conclusion.
Marking guidance:
Accept all valid responses.
OR