Should All Economies Be Mixed?
TITLE
Assess whether all market economies should become mixed economies.
ESSAY
Title: The Debate on Market Economies and Mixed Economies
Introduction
💥 Define market economies and mixed economies
💥 Briefly discuss the key features of each economic system
Market Economies
💥 Minimal government intervention
💥 Decisions based on demand and supply
💥 Encouragement of competition for efficiency
💥 Individuals act on self💥interest
Arguments for Market Economies remaining as they are
💥 Less government intervention leads to more efficient production
💥 Competition fosters innovation and lower prices for consumers
💥 Market forces allow for efficient allocation of resources
Mixed Economies
💥 Combination of market mechanisms and government intervention
💥 Addressing market failures such as under💥consumption of merit goods and overconsumption of demerit goods
💥 Providing public goods not adequately provided by the market
💥 Intervening in certain markets to maintain stable prices
Arguments for Market Economies becoming Mixed Economies
💥 Market failures exist where the market does not provide public goods efficiently
💥 Governments can correct under💥consumption of merit goods and overconsumption of demerit goods
💥 Intervention necessary in markets with unstable prices
Evaluation
💥 Assess the role of government intervention in correcting market failures
💥 Consider the impact of mixed economies on efficiency and innovation
💥 Evaluate the trade💥offs between government intervention and market freedom
Conclusion
💥 Justified conclusion on whether all market economies should become mixed economies
💥 Consider the balance between market efficiency and government intervention in achieving economic goals
Overall, the decision on whether all market economies should become mixed economies depends on the trade💥offs between market efficiency and the need for government intervention to correct market failures. It is important to strike a balance that maximizes economic welfare while ensuring efficient resource allocation.
SUBJECT
ECONOMICS
PAPER
A level and AS level
NOTES
Assess whether all market economies should become mixed economies.
Use of Table A: AO1 Knowledge and understanding and AO2 Analysis to mark candidate responses to this question.
Use of Table B: AO3 Evaluation to assess responses to this question.
Indicative content:
🌟AO1 Knowledge and understanding and AO2 Analysis🌟
💥 🌟NO:🌟Explanations of why market economies should remain as they are. For example, because there is no (or minimal) government intervention, decisions are taken on the basis of demand and supply, competition is encouraged which results in more efficient production, and both consumers and producers act in their own self💥interest.
💥 🌟YES:🌟Explanations of why market economies should become mixed economies. For instance, in a market economy there is a lack of provision of public goods, under💥consumption of merit goods, overconsumption of demerit goods, and the presence of markets with prices that are too low, too high, or too unstable. A one💥sided response can only gain a maximum of Level 2.
🌟AO3 Evaluation🌟
💥 Evaluation of whether all market economies should become mixed economies leading to a justified conclusion. Points to consider may include whether governments should provide public goods, merit goods, reduce the provision of demerit goods, intervene in the price mechanism, etc. A one💥sided response cannot gain any marks for evaluation.