A number of economies are devoting more of their resources to the provision of health care. Due to the economic problem, this involves them having to make difficult choices.

Mark scheme

Marking points from the official mark scheme (May/June 2014). The mark or mark type is shown in brackets.

1. [2] 2 marks for wants exceeding resources or wants are unlimited/infinite whilst resources are limited/finite or 1 mark for limited resources or scarcity.
2. [6] Up to 3 marks for the diagram:
3. • 1 mark for axes correctly labelled in terms of two different products or types of products.
4. • 1 mark for curve or downward sloping line – drawn to the axes.
5. • 1 mark for showing a trade off.
6. Up to 3 marks for written comments:
7. • definition of opportunity cost (1)
8. • recognition choice arises because of scarcity (1)
9. • example based on the diagram: if an economy produces e.g. 200 units of B it cannot produce 150 units of Product A (1)
10. • recognising that if an economy chooses to allocate more resources to making one product, it has to allocate fewer resources to another product/chooses to make more of one product it has to produce less of another product (2).
11. [4] Up to 3 marks on market economy:
12. 1 mark for recognising that in a market economy the price system allocates resources.
13. 1 mark for referring to the rate of demand and supply in a market economy/consumer sovereignty.
14. 1 mark role of the profit motive in a market economy.
15. 1 mark for resources are allocated by the private sector/there is no government intervention.
16. Up to 3 marks on mixed economy:
17. 1 mark for recognising the price system determines the allocation of some resources in a mixed economy.
18. 1 mark for recognising that the government decides on the allocation of some resources in a mixed economy e.g. governments produce public goods, governments produce or subsidise merit goods and tax demerit goods.
19. 1 mark for recognising there is both a private and public sector.
20. [8] Up to 6 marks for why it might:
21. Up to 3 marks for: likely to improve the health of workers [1] this should raise labour productivity [1] and so increase output/GDP [1].
22. Up to 3 marks for: possible reduction in birth rate [1] this may increase the labour force [1] and reduce dependency ratio [1].
23. Up to 2 marks for: likely to increase the quality of life/standard of living [1] which should increase life expectancy [1]
24. Up to 2 marks for: more people are likely to be employed in health care [1] this may reduce unemployment [1].
25. Up to 2 marks for: may make an economy a more attractive destination for FDI [1] which may provide a number of benefits e.g. advances in technology, higher employment [1].
26. Up to 6 marks for why it might not:
27. Up to 3 marks for: if resources are fully employed [1] it will involve an opportunity cost [1] e.g. fewer resources may be devoted to education [1].
28. Up to 3 marks for: may reduce the death rate [1] this may increase dependency ratio [1] and increase the cost of pensions [1].
29. Up to 3 marks for: more health care may be provided but the quality may not rise [1] population may increase by more than the extra provision [1] inefficiency may rise [1].
30. Maximum of 4 marks for a list-like response.