This question was also popular among the candidates few of whom scored relatively high marks. Candidate were required to distinguish between a free market economy and a centrally planned economy, explain any four features of a mixed economy and to state two demerits of a centrally planned. Most candidates that attempted this question were able to distinguish between free market economy and a centrally planned economy but were unable to explain the features of a mixed economy and demerits of a centrally planned economy. Candidates were expected to provide the following answers to score maximum marks in this question.
(a)        A free market economy is characterized by private ownership of the means of
            production.  The market is regulated by the price mechanism.  A centrally - planned economy on the other hand , is one characterized by state ownership and control
 of  the means of production.

(b)        (i)         The existence of a public sector which produces goods and services which
                        may not be effectively produced by the private sector.
           
            (ii)        The existence of a private sectors.
            (iii)       Joint ventures organized by both the private and public sector.
            (iv)       Joint decisions bordering on the basic economic problems.
            (v)        Joint ownership of resources.
            (vi)       Existence of state regulations/control.eg price control
            (vii)      Consumers have freedom of choice.
            (viii)     There is the existence of both profit and non-profit motives in production.

(c)        (i)         Bureaucracy.
            (ii)        Limited variety of goods and services.
            (iii)       Limited use of individual initiative.
            (iv)       Insufficient motivation for efficiency.
            (v)        Lack of competition.