Cambridge International as and a level Economics Ebook

a
Use a diagram to show how the price of 
wheat changed from 2008 to 2013.
b
Use diagrams to explain whether you agree 
with what was stated in the debate.
c
Use a diagram to explain why new 
subsidies were called for.
Transfer payment: 
a hand-out or payment made by the 
government to certain members of the community.
KEY TERM
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Cambridge International AS Level Economics

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the consumer. Th
e justifi cation must be on the grounds 
of equity. Th
e view is that everyone should have access 
to a certain level of health care and education regardless 
of income. Th
us, where these services are provided 
universally free, they are the material equivalent of 
monetary universal benefi ts.
As with transfer payments, there are substantial 
diff erences in the direct provision of goods and services 
between economies. Th
ese diff erences are seen between 
developed economies as well as between developed and 
developing economies. Health care provision is particularly 
variable. Th
e UK has had a National Health Service almost 
free to all for over 60 years; in contrast, free health care in the 
USA is limited. Th
ose who can aff ord to pay are obliged to 
take out Medicare insurance. In most low-income countries, 
Cuba being a notable exception, a charge is usually made for 
most types of health care provision. Th
is is especially the case 
in many countries in sub-Saharan Africa, where only a very 
basic system of health care is provided free of charge.
Th
e direct provision of goods and services is also a 
controversial issue. Th
e main criticism is that the market 
overprovides especially where no direct charge is made. 
Resources are not allocated effi
ciently. If a charge is made 
or introduced, demand is likely to fall. It can also be argued 
that many consumers could aff ord to pay a charge, so 
reducing the tax burden or allowing the funding saved in 
this way to be put to alternative uses.
TOP TIP
There are wide variations between economies in their 
taxation and benefits systems. It is therefore not easy to 
make generalisations.