CAIE A-Level Economics 1.4.2 Resource Allocation Systems

CAIE A-Level Economics 1.4.2 Resource Allocation Systems
Cambridge International AS & A Level Economics 9708 syllabus for exams in 2026, 2027 and 20282026–2028

Practise explaining how markets and central planning allocate scarce resources and assessing when mixed-economy intervention improves efficiency, equity or provision of goods.

How this is tested

  • trace how prices and profit direct resources toward changing demand in a market economy
  • contrast this with state ownership and production targets in a planned system
  • evaluate intervention using externalities, public or merit goods, inequality and government failure

Question 4

[Maximum number: 1]

Which change in the way resources are allocated in an economy is consistent with moving from a planned economy to a market economy?

A

A minimum price guarantee for apple producers is removed.

B

A new government authority is established to monitor inefficiencies in apple production.

C

The production of apples is subsidised to increase output.

D

The sale of apples has a maximum price imposed.