How to respond to questions in Economics
Positive and Normative
Statements
A normative statement is a value judgement
and states what someone thinks ‘ought to be’.
Normative statements are subjective and
influenced by personal biases, background,
personal politics
An example of a normative statement:
To clean up air quality and cut down carbon
emissions by 25%, 4 x 4 vehicles should only be
sold to farmers and those living in rough
terrain areas.
Economists must always use positive statements
when making responses, not normative.
A positive statement is one that is objective
and can be backed up by evidence.
An example of a positive statement:
If carbon emissions were cut by 25%, air
quality would improve and the number of
people diagnosed with asthma would decrease
significantly.
Politicians and members of the general
public use normative statements.
As Economists, you must learn to use
positive statements .
This does not mean you can’t have your own
opinions on issues but when writing essays
and in assessments – use only positive
statements – those that can be justified by
evidence.
Identifying Question Types by
Recognising
Command Words
‘Identify’ and ‘State’ Questions
These questions don’t require any detail and can be
answered by naming, listing or using bullet points
Normally one mark is allocated per item named
An example of an ‘identify’ question:
Identify the 4 factors of production.
•
•
•
•
Land/1
Labour/1
Capital/1
Enterprise/1
4/
4
(4 marks)
‘Suggest’ Questions
Require more than just naming. State your ideas
or proposals in sentences. Can be linked to ‘give
reasons for your suggestions’, ie ‘justify your
answer’.
Normally one mark is allocated to the suggestion and one
for a good, linked justification.
When answering ‘suggest’ questions:
• the suggestions must fit the situation
• must be realistic
• may have to be justified
An example of a good ‘suggest’ answer:
4/
4
Suggest ways in which land can be made more
‘mobile’ giving reasons why this may be desirable.
(4 marks)
Vacant land can be treated with fertilisers to make
it suitable for growing crops.
SUGGESTION
/1 This
would make the country more self-sufficient and
less dependent on imports.
REASON
/1
Land can
be reclaimed from the sea to build an airport
runway
SUGGESTION
/1 taking noise and pollution away
from built up areas.
REASON
/1
An example of a bad ‘suggest’ answer:
Suggest ways in which land can be made more
‘mobile’ giving reasons why this may be desirable.
(4 marks)
Reclaim land from the sea and use fertilisers.
2 perfectly good
suggestions have been
named but this is not a
‘name’ question and there
are no reasons why these
are good suggestions so,
no marks can be given.
0/
4
‘Explain’ Questions
These are the most common types of questions
in Economics and are designed to test your
knowledge and your powers of analysis.
When answering ‘explain’ questions:
• demonstrate your knowledge by making a point
• then expand the point with more detail or example
• show linkage or connections between factors
• assume you are explaining to someone with no
knowledge of the subject
• structure your answer in a logical sequence
An example of an excellent ‘explain’ answer:
Explain the difference between scarcity and shortage.
(8mks)
In economics scarcity has a different meaning from the
normal usage. POINT
Scarcity means finite ie there is an
end to supply whereas shortage implies a more temporary //2
situation where more is demanded than supplied EXP/ DEFINITION
The 4 economic factors of production (land, labour,
capital and enterprise) are always scarce but they are not
POINT
always in a state of shortage
because they are
mobile between alternativeEXP/REASON
uses.
//4
The mobility of factors can overcome shortages but not
scarcity. POINT By shifting resources from one use to
another we can overcome shortages. EXP/REASON //6
A shortage of land for housing can be resolved by using
brown belt land ie old industrial sites like the former
Ravenscraig site. EXP/EXAMPLE //8
‘Describe’ Questions
This type of question tests the depth of your
knowledge so your answers must show expansion
of any points made
If you simply make points, you have not described
When answering ‘describe’ questions:
• make a point
• expand on it by giving clarification or extra
information
• give an example to illustrate the point made
An example of a good ‘describe’ answer
Describe the effects of scarcity on individuals.
(6 marks)
Scarcity forces individuals to make choices. All resources
have alternative uses but are finite so individuals with
infinite wants, must choose how to use their resources./1
This is the basis of economic theory – the allocation of scarce
resources to infinite wants./1
Money is an example of a finite resource that has many
alternative uses. An individual may have saved enough
money either to buy a car or to go on holiday but not both./1
If the choice is the car, then the holiday has to be done
without and the individual has experienced opportunity
cost./1 The holiday is the opportunity cost of choosing the
car./1 Opportunity cost is defined as the loss of the next
best alternative./1
‘Discuss’ Questions
You can only get full marks if you demonstrate
a well-organised, well-argued, convincing argument
When answering ‘discuss’ questions:
• clearly communicate relevant information
• arrange your answer in a logical sequence
• use examples and/or diagrams for illustration
• debate both sides of the argument impartially
• draw conclusions based on your argument
An example of a ‘discuss’ question
Discuss advantages and disadvantages of a free market economy. (10 mks)
A free market economy is one in which resources are privately owned and
acquired via the price system, therefore those with the spending power
acquire the resources./1 Individuals are able to set up enterprises
supplying goods or services for profit./2 High earners can choose from a
wide variety of goods and services/3 and can achieve a high standard of
living./4 So there are real incentives to work for reward under a free
market system./5
On the other hand, low earners are unable to access the choices open to
others/6and there tends to be a wider gap between rich and poor than
under other systems./7Only goods and services that return a profit are
supplied,/8the others – public goods - tend to be provided by the state and
paid for by taxing the better off which is not always popular./9
More countries are moving towards increasing free market opportunities
and therefore the free market approach would appear to be the model
most favoured as it tends to deliver the most individual opportunities
and prosperity./10
‘Compare’ Questions
Also ‘compare and contrast’. This type of question
requires you to describe the similarities and/or
differences between alternatives.
When answering ‘compare’ questions:
• find aspects by which to compare
• for each aspect, describe each alternative
• use the words ‘whereas’, ‘while’, ‘on the other hand’
An example of a ‘compare’ question
Compare a free market system and a fully planned system
as a means of allocating resources.
(6 marks)
In a free market system resources are privately owned and
allocated by means of the price system so no single body
allocates resources. Under a fully planned system, on the
other hand, the state (govt) owns all the resources//2 and
decides who gets resources, how many and for what
purpose.//4
The free market price systems means that anyone with the
means can acquire resources to use as they wish while in the
fully planned system only those the government chooses is
allocated resources and must use them for the purpose the
state decides.//6
Other Terminology Used
Feature - a point of distinction
One feature of a mixed economy is it has both a public and
a private sector.
Effective - successful, productive
A production possibility chart can effectively demonstrate
opportunity cost.
Consequences - the initial effects, the immediate results
The consequences of changing from a command economy to
a free market system can be an unstable economy and
hardship for many individuals.
Implications - in the long term, far-reaching effects
The implications of changing from a command to a free
market economy are greater access to resources and an
increased standard of living for the majority of individuals.