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EnglandEconomicsQuick questions
Component 1: Microeconomics - Introduction to markets
Quick questions on Economic systems and efficiency - OCR A-Level Economics (H460)
4short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What are free-market strengths?Show answer
the price mechanism coordinates millions of decisions efficiently, competition drives down costs and spurs innovation, and consumer sovereignty rewards firms that meet wants. Free-market weaknesses: it under-provides public goods, over-produces goods with negative externalities, ignores equity and can create monopoly power.
What are command-economy strengths?Show answer
it can prioritise equity, provide public goods directly and mobilise resources for national goals. Command-economy weaknesses: central planners lack the information that prices carry, so allocation is often inefficient, shortages and surpluses are common, and there is weak incentive to innovate or cut costs.
What is q1?Show answer
Distinguish between a command economy and a mixed economy. [4 marks]
What is q2?Show answer
Explain the difference between allocative and productive efficiency. [4 marks]
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