I firmly believe that best way to prepare for essays is through highly focused, exam-oriented preparation. And the most exam-oriented preparation you get is past year papers. However, randomly doing past papers is highly ineffective; your practice needs to be structured to allow you to gain as much as possible. This requires a tightly-woven strategy and military-grade planning (hehe).
This guide does just that – it packages the model essays on ‘Efficiency and Market Failure’ in a way that’s designed to optimise your mastery of the material, and allow you to tackle any exam question on the topic!
Let’s begin!
The first thing you’ll need to know is how to describe efficiency and market failure in detail, and precisely. This essay deals with that, and will provide you with a very standard ‘template’ which can be modified and used across almost any essay within this topic:
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In recent years, many countries have faced economic difficulties. At such a time, discovering the best means of allocating scarce resources becomes much more pressing. Consider whether the study of economics has anything to offer to achieve an efficient allocation of resources in a country. [25] Model Essay: 17ON-43-7 |
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Next, you’ll need to understand why you’re learning all this stuff about efficiency and market failure. The reason is that economic theory says that the way to maximise welfare is to allocate resources efficiently! Therefore, we need to know what efficiency is, so we know how to maximise welfare for the people of a country. This essay deals with that:
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It has been said that the aim in the allocation of resources should be to achieve the greatest happiness for the greatest number of people. Model Essay: 16ON-42-2 |
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Now, let’s deal with two classic questions that come up all the time! The first is whether a free market can work to allocate resources efficiently. I cover that with this sample:
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A society that says it cares about efficiency needs to abandon the notion of a market system to allocate resources. Markets only serve self-interest, they are never efficient. Discuss whether this opinion is supported by economic analysis. [25] Model Essay: 17FM-4-7 |
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Here’s another permutation of that essay, which asks whether or not privatisation and competition will help or hinder efficiency.
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Discuss whether privatisation and an increase in competition would hinder or help the achievement of economic efficiency. [25] Model Essay: 17ON-41-2 |
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The second is whether or not government intervention will help achieve efficiency. Part (b) of this essay deals with that, and as an added bonus, also provides an excellent example of how to deal with questions asking about ‘necessary and sufficient conditions’.
I’ve included a page of notes at the end explaining exactly what it means!
Model Essay: 17ON-42-2 |
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Part (a) of the essay above is something that’s already been covered in definitions of efficiency – how to use PPCs to demonstrate efficiency. However, the essay here deals with it in a little more depth, so it’s definitely worth checking out!
Finally, here’s what I call a ‘random question’. One of those things you can’t really study for or predict, because the exam could throw anything at you. However, knowing all the material above will definitely allow you to write a top-quality essay with just a little bit of thinking and modification of material you already know.
This particular one asks whether the reason for free market failure is the ‘complex modern economy’. Note that it’s just a variation on ‘Is the free market efficient?’, which we’ve covered above! You just have to add in a little bit of analysis to consider whether or not the failure is due to the ‘complex modern economy’ (it’s not).
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Adam Smith’s eighteenth century idea of an ‘invisible hand’ where the free market allocates resources effectively and efficiently is false because the ‘invisible hand’ cannot work in a complex modern economy. Do you agree with this argument?. [25] Model Essay: 16ON-41-2 |
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So, after following this guide all the way through, here’s what you’ve mastered:
- How to describe efficiency and market failure (applicable to all essays on the topic).
- Why you’re learning this (to learn how to maximise welfare).
- Whether the free market allocates resources efficiently.
- Whether government intervention can achieve efficiency.
- A sample of how to adapt your knowledge to a small twist CIE throws in!
Voila. You’re ready.
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