Specification point 1.1.6 · Theme 1

Free market economies, mixed economy and command economy

Nature of economics · Introduction to markets and market failure

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3
AS Paper 1, June 2023, Q6(g)EssayEvaluate
Optional20 marks

Case study · The market for television content

Evaluate the possible disadvantages of a free market approach to the provision of television content.

1.3.1 · Types of market failure1.3.3 · Public goods1.1.6 · Free market economies, mixed economy and command economy
Types of market failure revision notes Public goods revision notes Free market economies, mixed economy and command economy revision notes
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1

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8
A-level Paper 1, June 2023, Q1(a)Short answerExplain
4 marks
ContextIn a major reform of its command economy, the Cuban government will allow small private businesses to operate in most fields. Free market economists have long called for the role of small business to be expanded to help jump-start the economy and to create jobs.

With reference to the information provided, explain one advantage of a free market economy.

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1.1.6 · Free market economies, mixed economy and command economy
Free market economies, mixed economy and command economy revision notes
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AS Paper 1, June 2023, Q5(a)Short answerDefine
2 marks
ContextDuring the global health crisis, 11.7 million jobs were furloughed, costing the UK Government £70 billion. This meant people were paid by the government 80% of their wages even though they did not work. Some private sector employers continued to pay the remaining 20 %.

With reference to the above information, define the term ‘mixed economy’.

1.1.6 · Free market economies, mixed economy and command economy
Free market economies, mixed economy and command economy revision notes
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A-level Paper 1, June 2019, Q5(a)Short answerExplain
2 marks
ContextFree market economics is being challenged. The arguments for and against are being increasingly discussed within many countries.

Explain how resources are allocated in a free market economy.

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1.1.6 · Free market economies, mixed economy and command economy1.2.7 · Price mechanism
Free market economies, mixed economy and command economy revision notes Price mechanism revision notes
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AS Paper 1, June 2018, Q1(b)Short answerCalculate
2 marks
ContextStatement 1: Cuba has a healthcare system with a patient to doctor ratio of 155:1. Statement 2: Other countries ought to adopt a similar healthcare system to that which exists in Cuba.

Cuba’s population is estimated to be 11 million. With reference to Statement 1 above, calculate the estimated number of doctors in Cuba. You are advised to show your working.

1.1.6 · Free market economies, mixed economy and command economy
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4
A-level Paper 1, June 2023, Q1(b)Multiple choice
1 mark
ContextIn a major reform of its command economy, the Cuban government will allow small private businesses to operate in most fields. Free market economists have long called for the role of small business to be expanded to help jump-start the economy and to create jobs.

Which one of the following economic thinkers supported the idea of a command economy?

AAdam Smith
BFriedrich Hayek
CJohn Maynard Keynes
DKarl Marx

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1.1.6 · Free market economies, mixed economy and command economy
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AS Paper 1, June 2023, Q5(c)Multiple choice
1 mark
ContextDuring the global health crisis, 11.7 million jobs were furloughed, costing the UK Government £70 billion. This meant people were paid by the government 80% of their wages even though they did not work. Some private sector employers continued to pay the remaining 20 %.

Which one of the following is a likely advantage of a command economy?

ALow levels of unemployment
BPrice acts as a signal to allocate resources
CPrice controls cause shortages of goods
DThe profit motive gives firms the incentive to be more efficient
1.1.6 · Free market economies, mixed economy and command economy
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A-level Paper 1, June 2019, Q5(b)Multiple choice
1 mark
ContextFree market economics is being challenged. The arguments for and against are being increasingly discussed within many countries.

Which one of the following statements is true?

AFriedrich Hayek believed that the government should subsidise inefficient firms
BFriedrich Hayek was a key advocate of command economies as a way of allocating resources
CKarl Marx advocated allocating resources via the free market
DKarl Marx criticised the private ownership of factors of production

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1.1.6 · Free market economies, mixed economy and command economy
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