Edexcel IGCSE Economics 1.1.5 the mixed economy
Use this mixed-economy set to define sectors, explain market failure and judge privatisation or public provision in context.
- Syllabus
- First assessment 2019
- Course
- Economics 4EC1
Exam points
- Define mixed economy, public sector, private sector and privatisation from mark-scheme wording.
- Explain market failure using public goods, free riders, information gaps or externalities.
- Evaluate intervention or privatisation for consumers, workers, firms and governments.
Covered syllabus points
1.1.5.a Mixed economy1.1.5.b Public and private sector1.1.5.c Public and private sector ownership, control and aims1.1.5.d What, how and for whom to produce in a mixed economy1.1.5.e Market failure and inefficient resource allocation1.1.5.f Why governments intervene in markets1.1.5.g Public goods and the free-rider problem1.1.5.h Public and private sector roles in production1.1.5.i Relative importance of public and private sectors1.1.5.j Privatisation1.1.5.k Effects of privatisation on stakeholders
1.1.5 The mixed economy question 1
[Maximum number: 2]
What is meant by the term mixed economy?
AO1 2 marks
Award up to 2 marks for a correct definition
The state/public and private sectors (1) provide goods/services between them (1)
Accept any other appropriate response
(2)
1.1.5 The mixed economy question 2
[Maximum number: 2]
What is meant by the term private sector?
AO1 2 marks
Award up to 2 marks for a correct definition
The state/public and private sectors (1) provide goods/services between them (1)
Accept any other appropriate response
(2)
1.1.5 The mixed economy question 3
[Maximum number: 9]
Question (a)
(a)
The Brazilian Government announced plans to privatise one of its state-owned food companies.
Explain one possible advantage of privatisation for consumers in Brazil.
[ 3 ]
AO2 3 marks
Award 1 mark for identifying an advantage
Award 1 mark for developing the response
Award 1 mark for the response being in context
- Consumers may benefit from lower prices (1) because a private firm is likely to want to be efficient (1) so it will aim to produce food at its lowest possible cost (1)
- Better quality may be available to consumers (1) because private firms will aim to make a profit (1) meaning they need to retain customers by providing quality food products (1)
Accept any other appropriate response
(3)
Question
number
With reference to the data above and your knowledge of economics, analyse how market failure is likely to occur at the TSFG venue.
Indicative content
Question (b)
(b)
The Tallinn Song Festival Grounds (TSFG) is a popular live music venue in Estonia and can hold 65,000 people. Although it is very popular there are only a few firms selling food and drink at the TSFG venue.
The lack of competition at the TSFG venue means that service is slow and queues are long. Food and drink prices are expensive and security checks mean that no food and drink can be brought in from outside the TSFG venue.
With reference to the data above and your knowledge of economics, analyse how market failure is likely to occur at the TSFG venue.
[ 6 ]
AO2 (3 marks)/AO3 (3 marks)
AO2 and AO3
- Market failure exists where resources are not allocated efficiently
- Examples of market failure include externalities, missing markets, lack of information, factor immobility and lack of competition
- There is a lack of competition selling food and drinks at the TSFG, meaning customers have limited choice of where to buy refreshments inside the grounds
- This means higher prices can be charged because customers cannot get refreshments anywhere else
- As people spend several hours at the venue, they are likely to need something to eat and/or drink during their visit
- Therefore, the high prices and reduced choice leads to an inefficient allocation of resources
Level
Mark
Descriptor
0
No rewardable material.
Level 1
1-2
- Demonstrates basic knowledge and understanding by developing relevant points. Limited application of economic terms, concepts, theories and calculations (AO2).
- Information presented will lack selectivity and organisation. Interpretation of economic information will be limited, with a lack of analysis of issues (AO3).
Level 2
3-4
- Demonstrates partial knowledge and understanding by developing relevant points. Partial application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate some selectivity and organisation. Interpretation of economic information will be good, with some analysis of issues (AO3).
Level 3
5-6
- Demonstrates clear knowledge and understanding by developing relevant points. Appropriate application of economic terms, concepts, theories and calculations (AO2).
- Information presented will demonstrate excellent selectivity and organisation. Interpretation of economic information will be excellent, with a thorough analysis of issues (AO3).
All question bank results loaded