Economic Systems and the Role of Intervention
What Is Economics? Scarcity, Choice, and Economic Models
AO2
Syllabus requirement
Compares free-market, planned, and mixed economies while debating the merits of market solutions versus government intervention.
Assessment objectives
AO2 Application and Analysis
Summary
This topic explains how different economic systems organise the allocation of scarce resources and the role of government intervention. It contrasts free-market, planned and mixed economies, describes why markets can allocate resources efficiently through price signals and profit incentives, and shows why government intervention may be needed when markets fail while also creating trade-offs.