When I look at this, it borders on indoctrination rather than teaching. Anyone has thoughts on the nature of these exam question?
Economics is largely the study of allocation of resources. I see nothing wrong with the questions. There are good and bad things about all economic policies.
Because, in a free market, the individual that produces more valuable goods and/or service receives a higher income.
I see nothing wrong with that question unless you accept the socialist notion that individuals are entitled to equal incomes regardless of the worth of their contributions to the economy.
Actually, I see nothing wrong with these questions although the second is more controversial. If there is bias it would be in how answers are graded. A quick answer to each would be:
1. "The New Zealand government provides 'free'... education at state secondary schools. Explain why this results in a better resource allocation than the free market..."
Education is a public good. That is there is a spillover associated with education. As such people will not reveal their true preferences and try to "free ride" on the expenditures of others. This means the market will provide too little education.
One of the possible solutions to this market failure is to collectively, ie through taxation and government provision of the good, provide the good. This could be done via government schools or vouchers to subsidize private schools.
2. "Explain why using 'free market' policies causes income inequality."
Free market policies cause income inequalities because income inequalities are a natural part of an economy and serve an important economic function. The role of income inequality is to get the best, most able, most talented in appropriate fields. Society benefits when the most able people become brain surgeons. We don't want the car sales man and the brain surgeon to earn the same income whether monetary or whether non-monetary factors like prestige are included. If the car sales man and the brain surgeon do make the same amount of money/prestige, then the most talented brain surgeon might become a car salesman.
Society does not benefit from such a misallocation of resources. Thus, when sound free economic policies are adopted, income inequalities must necessarily results. They are a good thing.
Now if when expanded, these two short answers would get high marks on the test, then the test is not biased toward socialism. On the other hand if they would get low marks then the test is biased. My answers are pretty much the answers of standard modern economic theory, although as I said the second is somewhat more controversial than the first.