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SUGGESTED ANSWERS
AQA
Economics
Advanced Level
Suggested Answers and
Examiner Commentary for:
PAPERS 1, 2 & 3
IMPORTANT NOTICE
These suggested answers have been prepared solely to help students
develop their exam technique for future exam sittings. These answers
are not endorsed by AQA. These answers were not written under exam
conditions and were prepared with knowledge of the relevant mark
schemes. The examiner commentary provided is written by experienced
examiners but is not endorsed by AQA. The answers provide just one
way to approach each question – other equally valid approaches and
responses are possible.
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SUGGESTED ANSWERS
AQA
Economics
Advanced Level
Suggested Answers and
Examiner Commentary for:
PAPER 1
IMPORTANT NOTICE
These suggested answers have been prepared solely to help students
develop their exam technique for future exam sittings. These answers
are not endorsed by AQA. These answers were not written under exam
conditions and were prepared with knowledge of the relevant mark
schemes. The examiner commentary provided is written by experienced
examiners but is not endorsed by AQA. The answers provide just one
way to approach each question – other equally valid approaches and
responses are possible.
Downloaded by: Ariah |
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AQA Economics
Paper 1
Context 1
Suggested answer – 2 marks Examiner
commentary
1 (126-110)/100*100 = 14.5 % to 1 dp Following the
precise
instructions is
crucial – in this
case, giving the
answer to 1dp
Suggested answer – 4 marks Examiner
commentary
2 For the expansion in the global sand market to be leading to increasing real prices of construction The first
sand, the change in the price of construction sand would need to be above the general price sentence
increase and positively associated with expansion in the global sand market. indicates that the
candidate clearly
Figure 2 clearly shows the global sand market is growing, expanding from demand of 180 millions understands the
of tons in 2010 to 244 millions of tons in 2015. Over the same period, the index of US producer concept of ‘real’
prices of construction sand increased from an index value of 100 in 2010 to an index value of 115 in data and has
2015. This is a 15% increase. At the same time the consumer price index increased from 100 to identified what
around 109. For 2010 – 2015, the data shows a clear correlation and the theory of demand they need to do.
suggests this is likely to be causality. It should be noted though that there were significant periods The data is then
of time when the price of construction sand did not rise in real terms, for example 2011 – 2013. accurately
quoted with
correct units and
some
“manipulation”
i.e. 15% increase.
Suggested answer – 9 marks Examiner
commentary
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3 One of the costs of production for sand is transportation. When transport becomes cheaper, all The question
else equal, this will lead to an increase in supply. This means that at each price, profit maximising clearly asks
firms will be willing to supply more. On the diagram, the industry supply curve shifts from S to S1. candidates to
If this is accompanied as well by a construction boom in East Asia, there will also be an increase in consider the
demand. This is because “sand is mostly used in the construction industry to make concrete and impact of both
asphalt” - Extract B lines 2 -3. China (which is in East Asia) has a rapid pace of construction and the construction
the impact is therefore likely to be large. On the diagram this is shown by the shift in the demand boom and
curve from D to D1. This means cheaper
that at each price, consumers are transport – this
willing to demand more. Initially candidate has
the market was in equilibrium at considered both,
P,Q, but the increase in both and therefore
supply and demand throw the made two shifts
market into disequilibrium. The on the diagram.
impact depends on the relative
size of the shifts of two curves, The second part
but as drawn, at the original price of the
P there is a now shortage, candidate’s
specifically of Q1 to Q2. answer shows a
very strong
If economic agents are rational, understanding
there is an incentive for dissatisfied consumers to increase the price they are willing to pay and this of how new
sends a signal and provides an incentive for even more resources to be allocated to this market. equilibrium
While the higher price means that some consumers will now ration, the overall effect is to increase points are
the equilibrium quantity. The market for sand has grown from Q to Q3. reached in
markets, using
relevant price
mechanism
terminology
Suggested answer – 25 marks Examiner
commentary
4 “Critics argue that the international community needs to treat sand like a resource on a par with The use of
clean air, biodiversity and other natural endowments” – Extract C lines 2 to 3. This suggests that relevant quotes
sand may be a common access resource where significant market failure is possible. On the other from the data to
hand, “substitutes for sand do exist” – Extract C line 10, and “in some rich countries a shift towards illustrate both
these alternative production processes is already underway as sand prices rise” – Extract C lines 11 sides of the
– 12. This suggests that the market may, in some cases at least, be functioning well. Should the argument
scarcity of sand be solved by government intervention or is it a problem best solved by market presented in the
forces? Three factors will be considered. First, the view that the existence of market failure question is really
provides an argument in favour of government intervention. Next, another argument in favour of helpful.
government intervention that effective policy options exist and finally, the arguments against Outlining the
intervention. structure will
also help to
prevent the
essay from
drifting off track.
The accurate use
of terminology
here is a great
way to build
strong
knowledge
marks
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SUGGESTED ANSWERS
AQA
Economics
Advanced Level
Suggested Answers and
Examiner Commentary for:
PAPERS 1, 2 & 3
IMPORTANT NOTICE
These suggested answers have been prepared solely to help students
develop their exam technique for future exam sittings. These answers
are not endorsed by AQA. These answers were not written under exam
conditions and were prepared with knowledge of the relevant mark
schemes. The examiner commentary provided is written by experienced
examiners but is not endorsed by AQA. The answers provide just one
way to approach each question – other equally valid approaches and
responses are possible.
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
SUGGESTED ANSWERS
AQA
Economics
Advanced Level
Suggested Answers and
Examiner Commentary for:
PAPER 1
IMPORTANT NOTICE
These suggested answers have been prepared solely to help students
develop their exam technique for future exam sittings. These answers
are not endorsed by AQA. These answers were not written under exam
conditions and were prepared with knowledge of the relevant mark
schemes. The examiner commentary provided is written by experienced
examiners but is not endorsed by AQA. The answers provide just one
way to approach each question – other equally valid approaches and
responses are possible.
Downloaded by: Ariah |
Distribution of this document is illegal
, Stuvia.com - The Marketplace to Buy and Sell your Study Material
AQA Economics
Paper 1
Context 1
Suggested answer – 2 marks Examiner
commentary
1 (126-110)/100*100 = 14.5 % to 1 dp Following the
precise
instructions is
crucial – in this
case, giving the
answer to 1dp
Suggested answer – 4 marks Examiner
commentary
2 For the expansion in the global sand market to be leading to increasing real prices of construction The first
sand, the change in the price of construction sand would need to be above the general price sentence
increase and positively associated with expansion in the global sand market. indicates that the
candidate clearly
Figure 2 clearly shows the global sand market is growing, expanding from demand of 180 millions understands the
of tons in 2010 to 244 millions of tons in 2015. Over the same period, the index of US producer concept of ‘real’
prices of construction sand increased from an index value of 100 in 2010 to an index value of 115 in data and has
2015. This is a 15% increase. At the same time the consumer price index increased from 100 to identified what
around 109. For 2010 – 2015, the data shows a clear correlation and the theory of demand they need to do.
suggests this is likely to be causality. It should be noted though that there were significant periods The data is then
of time when the price of construction sand did not rise in real terms, for example 2011 – 2013. accurately
quoted with
correct units and
some
“manipulation”
i.e. 15% increase.
Suggested answer – 9 marks Examiner
commentary
Downloaded by: Ariah |
Copyright
Distribution tutor2u is illegal
of this document Page 2
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3 One of the costs of production for sand is transportation. When transport becomes cheaper, all The question
else equal, this will lead to an increase in supply. This means that at each price, profit maximising clearly asks
firms will be willing to supply more. On the diagram, the industry supply curve shifts from S to S1. candidates to
If this is accompanied as well by a construction boom in East Asia, there will also be an increase in consider the
demand. This is because “sand is mostly used in the construction industry to make concrete and impact of both
asphalt” - Extract B lines 2 -3. China (which is in East Asia) has a rapid pace of construction and the construction
the impact is therefore likely to be large. On the diagram this is shown by the shift in the demand boom and
curve from D to D1. This means cheaper
that at each price, consumers are transport – this
willing to demand more. Initially candidate has
the market was in equilibrium at considered both,
P,Q, but the increase in both and therefore
supply and demand throw the made two shifts
market into disequilibrium. The on the diagram.
impact depends on the relative
size of the shifts of two curves, The second part
but as drawn, at the original price of the
P there is a now shortage, candidate’s
specifically of Q1 to Q2. answer shows a
very strong
If economic agents are rational, understanding
there is an incentive for dissatisfied consumers to increase the price they are willing to pay and this of how new
sends a signal and provides an incentive for even more resources to be allocated to this market. equilibrium
While the higher price means that some consumers will now ration, the overall effect is to increase points are
the equilibrium quantity. The market for sand has grown from Q to Q3. reached in
markets, using
relevant price
mechanism
terminology
Suggested answer – 25 marks Examiner
commentary
4 “Critics argue that the international community needs to treat sand like a resource on a par with The use of
clean air, biodiversity and other natural endowments” – Extract C lines 2 to 3. This suggests that relevant quotes
sand may be a common access resource where significant market failure is possible. On the other from the data to
hand, “substitutes for sand do exist” – Extract C line 10, and “in some rich countries a shift towards illustrate both
these alternative production processes is already underway as sand prices rise” – Extract C lines 11 sides of the
– 12. This suggests that the market may, in some cases at least, be functioning well. Should the argument
scarcity of sand be solved by government intervention or is it a problem best solved by market presented in the
forces? Three factors will be considered. First, the view that the existence of market failure question is really
provides an argument in favour of government intervention. Next, another argument in favour of helpful.
government intervention that effective policy options exist and finally, the arguments against Outlining the
intervention. structure will
also help to
prevent the
essay from
drifting off track.
The accurate use
of terminology
here is a great
way to build
strong
knowledge
marks
Downloaded by: Ariah |
Copyright
Distribution tutor2u is illegal
of this document Page 3
