Explain the meaning of and whether there is a link (i) between Pareto optimality and equality; (ii) between free markets and equity.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. Meaning of Pareto optimality and equality (4), no link. Pareto optimality doesn't necessarily produce equality (2); meaning of free markets and equity (4) free markets sometimes result in outcomes that are thought not to be fair (equitable) (2).
2. L4 (9-12 marks): For a sound explanation of all four concepts and conclusion about the two links.
3. L3 (7-8 marks): For weaker explanation of four concepts or sound explanation of three concepts and conclusion about at least one of the links.
4. L2 (5-6 marks): For a sound explanation of two of the concepts but little comment about the link.
5. L1 (1-4 marks): For an answer that has some basic correct facts but includes irrelevancies and errors of theory.
6. Explanation that there may be a lack of efficiency due to overproduction or under production. Discussion of the methods: taxes, subsidies, licences, regulation, information, permits, 'nudge' incentives, granting property rights, privatisation, nationalisation and the relevance of the choice to either over or under production.
7. L4 (9-13 marks): For a critical discussion of at least three methods and their effectiveness and application. (Taxes and the opposite subsidies should count as one alternative).
8. L3 (7-8 marks): For a critical competent discussion of at least two methods or a weaker comment on at least four methods.
9. L2 (5-6 marks): For a competent comment on one method or a comment on three or more methods.
10. L1 (1-4 marks): For an answer that has some basic correct facts but includes irrelevancies and errors of theory.