(a)[8]
Explain how resources are distributed in a free market economy.
(b)[12]
Discuss how the market system could be affected by government intervention in order to supply suitable quantities of goods and services.
Economics 9708 · AS & A Level · Resource allocation in different economic systems
Resource allocation in different economic systems — practice question
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “A free market system depends on demand and supply with no government intervention. Resources are the factors of production. Changes in consumer and producer behaviour alter demand and supply, which then changes prices. Higher prices, profits and rewards attract more resources into that use. Lower prices have the opposite effect.” …
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