The table above is a summary of the question styles used in the AS SAMs. I have used some but not all of these in this paper.

Transcription

1 Theme 1 interim assessment This case study has taken questions from past exams to try and produce a 50-mark paper which could be used as an interim assessment in the first year. Questions have been written according to the style being used in the 2015 specification. I took the question styles from the SAMs. You should always refer to the SAMs to see how live papers will be constructed. The questions and suggested possible responses have not gone through the normal question paper writing process and as a subject advisor I do not have any contact with the Assessment team or the examiners when they are discussing exams. I have adapted this case study to support teachers looking for practice material. Section A In this section I used the AS model of 5 x 4-mark questions. In each 4-mark question, one mark is based on a multiple choice question. I took these from past GCE 2008 and IAL papers. The other three marks are related to the same context. AO1 AO2 AO3 AO4 Section A (5 x 4 marks) MCQ 1 MCQ 1 MCQ 1 Illustrate 1 Annotate 2 Define (1) 1 Define/what is meant by (2) 2 Calculate (2) 2 Calculate (3) 1 2 Explain (2) 2 Explain (3) The table above is a summary of the question styles used in the AS SAMs. I have used some but not all of these in this paper. A level Papers 1 and 2 also have a Section A with 5 x 5-mark questions of a similar nature to these.

2 Section B In this interim assessment, Section B is worth 30 marks. This does not replicate the pattern which will be used in the live papers. AS Papers 1 and 2: Section A (20 marks) + Section B (60 marks) AL Papers 1 and 2: Section A (25 marks) + Section B (50 marks) + Section C (25 marks) AL Paper 3: Section A (50 marks) + Section B (50 marks) This paper does not have a short-answer section. Questions styles are similar to the Section B questions on the other papers. In this paper, I have used: 2 x 5-mark Explain questions 1 x 8-mark Examine question 1 x 12-mark Discuss question (This uses a levels-based mark scheme) The range of possible question types at AS and A level are in the table below. Section B and C AO1 AO2 AO3 AO4 Calculate (4) 2 2 Calculate (5) Explain (4) 2 2 Explain (5) Explain (5) Explain (5) Explain (6) Examine (8) A level only Assess Discuss (12) A level only Discuss Evaluate (20) AS level only Evaluate (25) A level only Possible responses The suggested responses should not be taken to imply that this would be the only way to answer the questions. They are suggestions. Colin Leith TeachingEconomics@pearson.com

3 Section A 1 (a) (b) What is meant by income elasticity of demand? (1) (c) Calculate the change in the demand for tobacco if US incomes rise by 10%. (2)

4 2. (a) (b) Which diagram shows the economy experiencing decreased productive potential (1) (c) Explain the difference between capital and consumer goods. (2)

5 (b) Explain the difference between consumer surplus and producer surplus (2) (c) Illustrate the likely effect of the drought on the diagram (1)

6 4. (b) Explain why the price elasticity of demand in Europe is significantly different from the price elasticity of demand in sub-saharan Africa (3)

7 (b) Define the relationship between coffee and sugar. (1) (c) Annotate the diagrams above to show the effect of the bumper coffee harvest (2)

8 6. Section B

9 Question 6 (a) With reference to Figure 1 and Extract 1, explain why the price of cotton more than doubled in Use a supply and demand diagram in your answer. (5) (b) Referring to cross elasticity of demand, explain the likely relationship between the price of cotton and the demand for synthetic materials used in making clothing. (5) (c) With reference to Extract 1, examine two factors that are likely to influence the price elasticity of supply of cotton. (8) (d) With reference to Extract 2, discuss the likely effects of the increase in the price of cotton on retail clothing firms such as Next. (12)

10 Possible answers Section A (20 marks) 1 (a) C 1 (b) Definition of income elasticity of demand or correct formula (the responsiveness of demand for a good due to a change in income, or, %ΔQD %ΔY = YED) 1 (c) A 10% increase in income leads to a 1.2% fall in demand for tobacco %ΔQD 10% = %ΔQD = x 10% %ΔQD = (a) C 2 (b) B 2 (c) Consumer goods produced to satisfy peoples needs and wants; capital goods are fixed assets used to produce other goods (machinery, equipment, factories) 3 (a) B 3 (b) Consumer surplus is the difference between the price consumers are willing to pay for a good and the actual market price paid / the area above the equilibrium price and below the demand curve whereas producer surplus is the difference between the price at which producers are willing to supply and the actual market price received. 3 (c) Shift in supply to the left 4 (a) B 4 (b) K1Ap1An1 Europe much more price elastic -1.2 than sub-saharan Africa 0.5 More substitutes in Europe e.g. ferries, trains, Eurostar, TGV A greater number of substitutes means that consumers can switch more easily and are more likely to be sensitive to price changes. 5 (a) C 5 (b) Complementary goods - sugar is a complement because you add sugar to coffee to sweeten it 5 (c)

11 Section B (30 marks) (a) With reference to Figure 1 and Extract 1, explain why the price of cotton more than doubled in Use a supply and demand diagram in your answer. (5) Question Answer Number 6 (a) Knowledge 1, Application 1, Analysis 3 Knowledge/understanding: Mark accurate supply and demand diagram with original equilibrium Application: Use of data: explicit reference to Figure 1 on the rise in price of cotton in 2010 e.g. a rise from around 70 US cents to 160 US cents per pound (1) A decrease in supply e.g. flooding in China and Pakistan / Indian Government export ban (1) An increase in demand due to speculative buying (1) Analysis: Supply shifted leftwards (1) Demand shifted rightwards (1) Accurate new equilibrium sowing higher price (1) development of either a supply or demand factor e.g. discussion of supply being highly price inelastic, so speculative demand will have a bigger impact upon price.(1) (5)

12 (b) Referring to cross elasticity of demand, explain the likely relationship between the price of cotton and the demand for synthetic materials used in making clothing. (5) 6 (b) Knowledge 1, Application 2, Analysis 2 Knowledge/understanding: Definition or formula for cross elasticity of demand (the responsiveness in demand for one good due to a change in price of another good or %ΔQD good x %ΔP good y) Application: Strong increase in cotton prices in 2010 Cotton and synthetic materials are substitutes or in competitive demand Analysis: They have a positive cross elasticity of demand a rise in price of cotton has caused an increase in demand for synthetic materials / diagram depicting this relationship (5)

13 (c) With reference to Extract 1, examine two factors that are likely to influence the price elasticity of supply of cotton. (8) Question Answer Number 6 (c) Knowledge 2, Application 2, Analysis, Evaluation 2 Knowledge/understanding: 2 marks for identification of two factors (1+1) Definition or formula of price elasticity of supply (the responsiveness of supply due to a change in price or %ΔQS %ΔP) Diagram distinguishing between inelastic and elastic supply Clear written understanding of the difference between price inelastic and price elastic supply Mark Application: 2 marks for reference to the data (1+1) Extract 1 refers to farmers devoting more land to grow cotton which implies spare capacity Extract 1 refers to stocks of cotton at their lowest level for five years Analysis: 2 marks for linked explanation of two factors (1+1) Factors may include: Time period / it appears to be price inelastic in supply within 100 days which is the growing period / but more elastic after this period Spare capacity in the industry or resources in economy / Indian Government ban on cotton exports /might contribute to overall inelastic supply for rest of world Ease of entry and exit to the market for farmers / development e.g. problems of raising finance Distinction between short run (at least one input fixed) and long run (all inputs variable) /application to type of inputs Evaluation : 2 marks for 2 evaluative comments, e.g. Evaluative use of the data: cotton may be less price inelastic in supply in long run since although price more than doubles, output is set to increase from 101m bales to 117m bales between 2010 and Discussion of level of stocks: supply is inelastic / perishability of cotton stocks. (8)

14 (d) With reference to Extract 2, discuss the likely effects of the increase in the price of cotton on retail clothing firms such as Next. (12) Question Indicative content Number 6(e) Knowledge 2, Application 2, Analysis 4 Mark Possible effects: Increase in production costs / retail stores are likely to increase the price of clothing Diagrammatic analysis depicting supply curve shifting inwards / depicting an increase in price of clothing (diagram or explanation of diagram must refer to clothing market) Decrease in profits / Investec analysts forecast fall from 560m to 542m / it may lead to a decrease in share price of retail stores - Investec do not recommend buying / fall in dividend payments / fall in producer surplus Fall in number of stores / fall in employment / fall in investment into clothing retail stores Retail firms might try and cut costs e.g. focus more on online sales and catalogue shopping / relocate stores to parts of town where rents are cheaper / staff wage freeze / switch to cheaper synthetic materials / reduce quality Consideration of further diversification e.g. home furnishings / might explain why Next shares rose by 20% over the year (8)

15 Question Number 6 (e) Indicative content Evaluation 4 Mark continued Factors might include Discussion of time; Lord Wolfson refers to cotton price bubble so it might fall back / Figure 1 refers to the forecast increase in cotton supply to 117m bales for Discussion of magnitude of cotton price rise (more than 100%) and impact on clothing prices (up to 10%). Discussion of the proportion of cotton costs out of total costs for clothing. Discussion of price elasticity of demand: clothing prices have hardly increased for nearly 20 years so there might be some scope to raise price and still keep consumer demand / impact on total revenue. Discount clothing firms such as Primark may gain or lose customers from high-end retailers such as Next and Marks & Spencer. Not much scope to source cheaper suppliers from far East as clothes retailers already use them. Other factors may come into play e.g. the recession or rising population or increase in marketing may impact on clothing market. (4)