Governments often intervene in markets to correct market failures, such as the under-provision of public goods.

Mark scheme

Marking points from the official mark scheme. The mark or mark type is shown in brackets.

1. 4(a) AO1: (Max 2 marks)
2. - Non-excludability (1)
3. - Non-rivalry (1)
4. - (Accept: free rider problem, missing market as direct implications).
5. 4(b) AO3/AO4: (Max 8 marks)
6. - AO3 (up to 4 marks) for analysis of effectiveness:
7. - e.g., ensures provision of essential goods (1), overcomes free-rider problem (1), promotes social welfare/equity (1), internalising external benefits (1).
8. - AO3 (up to 4 marks) for analysis of limitations/ineffectiveness (government failure):
9. - e.g., inefficiency/bureaucracy (1), high cost/burden on taxpayers (1), difficulty in determining optimal quantity/quality (1), political influence (1).
10. - AO4 (1 mark) for reasoned conclusion/judgement:
11. - e.g., often necessary but not without its own challenges (1), comparison to alternative solutions like subsidies or private provision with regulation (1).