A free market economy operates to the benefit of both consumer and producer to achieve the most efficient outcome, and therefore there is no role for a government to play in controlling the market. Consider the extent to which this statement is correct.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. An explanation of productive and allocative efficiency. A discussion of the free market economy and its limitations. The role and limitations of government in controlling the market.
2. L4 (18-25 marks) For a discussion of both efficiencies which considers the effects of competition in achieving them. Two or more alternative forms of market failure and the application of government policies to reduce them. Maximum 21, if no conclusions.
3. L3 (14-17 marks) For a discussion of efficiency with a single form of market failure. A brief reference to the need for government.
4. L2 (10-13 marks) For an accurate though undeveloped explanation of efficiencies, market failure and/or government intervention.
5. L1 (1-9 marks) For an answer which shows some knowledge but does not indicate that the question has been fully grasped, or where the answer contains irrelevancies and errors of theory.