2

Economic systems

Activity (p. 14)

Students own answers. You should expect to hear discussion about branding,
captured market of X million people watching, etc.

Activity (p. 15)

Students own answers. Students could discuss the merits of being well paid and
doing a job you dislike or not earning very much but doing a job you love.

Activity (p. 17)

Students own answers. You should expect to hear discussions about branding and a
captured market for items such as the latest toys, mobile phone, games consoles or
sports shoes. Students might have a selection of images and/or video clips they find
on the internet.

Activity (p. 18)

Students own answers. For example, students could discuss the merits of
government versus private sector provision of certain goods or services. Alternatively
they consider the merits of being well paid (in a free-market economy).

Exam practice (p. 18)

1 In a mixed economy, resources are allocated by both the public sector and the
private sector. The public sector provides both public goods (such as roads, street
lighting and national defence) and merit goods (such as education and health care
services). Private individuals and firms, driven by profit, supply goods and services
in the private sector, e.g. groceries, clothing, furniture, foreign holiday, haircuts
and cars.
2 Whether education should be funded by the government depends on several
factors and viewpoints, including:
l The economic system operated by the country, e.g. a free-market economy will
have more private sector education, offering services to those who are willing
and able to pay. By contrast, in a planned economy, the state (government)
provides education for all members of society.
l The perceived benefits of education countries that value education very
highly will get more funding, from both the government and private sector
providers. Education brings about positive externalities (side effects) to society,
although this varies between countries.
l The size of the government budget a government running a huge budget
deficit is less able to fund educational services.
l Opportunity cost if the government deems education to be of lower impor-
tance (priority) than other items of government spending (such as health care,
public transport, protection of the environment or rectifying the problems of
unemployment), then government funding will be lower.
Award up to 4 marks for an unbalanced or one-sided argument.
 ward 57 marks for a well-balanced answer. At the top end, there is a reasoned
A
justification to whether education should be funded by the government.

Cambridge IGCSE and O Level Economics Hodder & Stoughton 2013 1