The Government is expanding the public sector provision of health care including dentist clinics (see Appendix 1). Identify and explain two external benefits to the rest of society of this increased provision of health care for poor families.

Mark scheme

Marking points from the official mark scheme (May/June 2016). The mark or mark type is shown in brackets.

1. [2] award one mark for each relevant third party external benefit
2. [2] award one mark for a relevant explanation of third party external benefit
3. [4] award two application marks for each external benefit
4. Award one mark for each relevant external benefit (maximum of two), such as:
5. • Jobs will be created/reduced unemployment
6. • Businesses will lose fewer days off from employees/increased productivity
7. • Children will have better dental health and therefore cost their parents less money in dental treatment, thereby increasing spending on other products.
8. Third party groups who are most likely to benefit from the increase in public sector dental clinics:
9. • High income families/private patients
10. • Others businesses – employers
11. • Other businesses – dental suppliers
12. • Households - tax revenue increases so more public spending.
13. Do not reward poor families or government free dental clinics as third party groups.
14. Award a maximum of three additional marks for each explanation - 2 of which must be applied to this context - of the benefits.
15. Indicative response: Jobs will be created [k] because more dentists will need to be employed at the clinics [ap]. Government-owned dental clinics will lead to lower levels of unemployment and this will increase spending for other businesses [an].This will also be true for receptionists as well as practice managers and dental assistants who will also find it easier to get a job [ap].
16. Possible application marks: less illness; qualified dentists; private patients; Government-owned dentist clinics; free treatment in Government dentist clinics for poor families; increasing number of Government-owned dentist clinics; job vacancies for dentists and assistants; country x.
17. There may be other examples in context which have not been included here.
18. W $ 560 000
19. X $1 000 000
20. Y $ 960 000
21. Z $ 160 000
22. (Format of the forecast boxes means that 000 or $ are not essential.)
23. Knowledge/Analysis/Evaluation – award up to eight marks using the levels-based mark scheme below.
24. Level 3: 7-8 marks. Well justified recommendation as which is the best way to choose.
25. Level 2: 4-6 marks. Detailed discussion of advantage/disadvantage of each suitable way to improve the cash flow.
26. Level 1: 1-3 marks. Outline of advantage/disadvantage of each suitable way to improve the cash flow.
27. Relevant points might include:
28. Example to increase the cash inflows (1) – e.g. increase number of patients; increase sales revenue; reduce time for payment by patients; bank loan would provide a cash injection.
29. Example to reduce the cash outflows (1) – e.g. reduce overheads; obtain trade credit/delay payment to creditors; reduce rent; reduce wages/lay-off workers.
30. The answer should not refer to profit or loss – the focus is purely cash flow.
31. Solutions should be realistic for a six-month period i.e. not long-term solutions.
32. Level 1: One mark for each statement e.g. Increase sales revenue (one mark).
33. Level 2: Four marks for the first L2 answer and then one extra mark for each additional L2 answer up to maximum of six marks. E.g. The amount of cash flow at the end of each month after. September is decreasing because the sales revenue is decreasing and so the business needs to find ways to increase the sales revenue in these months (L2). However, if it increases advertising to try to encourage more patients to go to the clinic then it may increase the cash outflows from advertising expenditure as well as inventory and so inflows will need to be greater than outflows for the cash flow to improve (L2). Five marks for good L2 answer.
34. Level 3: For L3 to be awarded there needs to be at least two L2 marks awarded and then a recommendation which justifies which is the best way to choose.