Markscheme May 2015 SL
Q1a
L1 – definition of PES, an idea of factors affecting PES
L2 – definition of PES, some explanation of a factor affecting PES
L3 – L2 + application in a diagram of types of PES
L4 – Explanation that PES will become more elastic over time as producers are able to change their
production, changing their allocation of resources (ease and speed; immediate, SR,LR); producer
substitutes, change technology, spare capacity.
Application to a market i.e. primary soft commodities which has inelastic supply
Q1b
Discuss, using a negative externalities diagram, that economic activity requiring the use of fossil fuels
to satisfy demand poses a threat to sustainability.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
xvi.
Define Neg. ext.
Explain how F.fuel causes that – pollution of producers: oil spills, damage in extraction,
air pollution – or of consumers with their cars (petrol) or products (plastic) – hence
water/land pollution
Define sustainability – ensuring resources available for future generations
Use a externality diagram to explain the production or consumption activity resulting in
over-production/consumption
At this point you are at level 2 (6-9 marks)
Identify the Q* point as socially desirable because it is sustainable
Link the pollution to what exactly is unsustainable: i.e. global warming (most likely)
Or Link the issue of non-renewable to depletion to why its unsustainable
At this point you are level 3 (10-12 marks)
Justify why pollution or extraction levels are unsustainable
Discuss that extraction may be sustainable if pollution technology improves
Discuss how demand raises the price and thus pays for extraction technology which will
supply more fossil fuels – hence may be sustainable
Discuss how global warming is likely not sustainable
Discuss GW is an international issue requiring international agreements to limit air
pollution
Discuss the problem of clear property rights prevents the ability to make polluters pay,
especially by country
Discuss the problem of developing economies are less able to contribute to reducing
pollution
Q2a
Use a diagram to explain how the lack of public goods leads to market failure.
i.
ii.
iii.
iv.
v.
vi.
vii.
viii.
Define PG (non-R/Ex)
With free-rider problem link to non-market provision
Justify its benefits for society; hence lack leads to market failure
Define MF: lack of a.e. (or under-provided)
Explain MSB/C shows external benefits to society
Diagram illustrates under-provision
Explain how an example product is non-ex. And non-rival (not just having pos. ext!)
Apply example from points ii-vi
Q2b
L1 – definition / characteristics of CARs: no ownership / property rights, no price mechanism due to
a lack of ownership, some CARs extend across borders, or don’t have borders
L2 – Overuse of CARs: use of an example of a CAR and how it is overused; NEC diagram (no one drew
NEP) with explanation how it leads to a market failure and therefore needs government intervention
Some link to threats to sustainability
Only one example of a CAR
L3 – L2 explanation as to why the government must address the issue of overuse of CARs,
application of possible solutions that governments use in a diagram
L4 – Must address the command term: arguments must be balanced and state assumptions
Use of various CARs and having different types of government intervention
Many students focused on possible government intervention types rather than the reason why the
government is the best stakeholder to deal with the overuse of CARs: power, international issues
related to certain CARs (air, overfishing, use of oceans), threats to sustainability
3a
L1 – Vague definitions, little understanding of structural Ue, able to name types
L2 – Correct definition, some understanding of structural Ue, an AD/AS labour market diagram,
explanation of different types/causes of structural Ue
L3 – L2 + D/S labour market diagram for a particular sector; examples have been used to CLEARLY
explain the causes/types of structural Ue
L4 – L3 with applied real-world examples
3b
L1 – definitions, identified market and interventionist SSPs
L2 – Identified different types of SSPs, they may have been applied to different types of structural
Ue, or to a lack of occupational or geographical mobility
Application in a diagram (LRAS right, AS labour in labour diagram increase closer to TLF)
L3 – Above + attempt to evaluate how appropriate these policies are; attempt at judgment using
valid reasoning/argument based on theory used
L4 – L3 applied to RWE
4a
L1 – definition of circular flow of income
L2 – definition, diagram/explanation of CFoI
Explanation that savings are a leakage, and that investments are injections.
L3 – explanation that an rise in savings increases the leakages and money is taken out of the flow
And an explanation that a fall in investments decreases the injections into the economy
L4 – Conclusion that indicates that a rise in savings and a fall in investment will have a negative
impact on the income circulating in the economy (slower EG, negative EG, depending on the
economic performance of an economy). Explanation that the size of the leakage and fall in injections
will determine how much the impact will be.
4b
L1 – definition market based SSPs, demand-side policies
L2 – explanation of how some of these policies might work
L3 – appl in a diagram
L4 – policies applied to types of Ue and how effective they are; RWE used (Ue% of real countries,
countries that currently have slow/no/neg EG)