Session 4:
Unit 1 Data Response
Questions
Ray Powell
Questions on Markets &
Market Failures
Unit 1 data response question papers
usually contain 2 questions covering:
Question 26: a market (or markets)
Question 27: market failure(s)
How Data Response Questions are
structured in the Unit 1 & Unit 2 exams
[01] Define the term
[02] Compare (or possibly identify)
[03] Explain
[04] Evaluate (or possibly assess,
or possibly
Do you agree? . .Justify your answer.
Extract A
Identify two points of comparison between the changes in the price indices for coffee
and tea over the period shown by the data in Extract A.
(8 marks)
Part [03] of a Data Response Question
on a Market
Part [03] of a question on markets may
require candidates to perform 3 tasks:
• Draw an S & D diagram to show an
equilibrium
• Identify a factor shifting the S or D curve
• Illustrate and explain the effect of the shift
The Data Response Question on
Market Failure
Usually one of the two Data Response
Questions in the Unit 1 exam is on a welldefined market failure. The main types of
market failure are:
•
•
•
•
•
Monopoly
Merit goods and Demerit goods
Public goods
Externalities
Income and wealth inequalities
These diagrams can be used to illustrate
‘bad’ and ‘good’ Monopoly
Merit Goods & Demerit Goods
Public goods and private goods
Practise drawing diagrams such as this one:
And this one: Resource misallocation and
negative externalities
The effect of consumers possessing imperfect information
(information failure)
Returning to the final part of a Unit 1 data response question,
three types of format are commonly used
Type 1: Focusing on the role of market forces
Type 2: Focusing on a particular type of
government intervention
A variant of Type 2, focusing on methods of government
intervention to correct examples of market failure
Type 3: Questions asking for an evaluation of the case for
and against government intervention to deal with a problem,
but without specifying any particular type(s) of intervention