2024_AQA: A-level ECONOMICS Paper 1 Markets and Market Failure (Merged Question paper and marking scheme): Wednesday 15 May 2024 A-level ECONOMICS

2024_AQA: A-level ECONOMICS Paper 1 Markets and Market Failure (Merged Question paper and marking scheme): Wednesday 15 May 2024 A-level ECONOMICS Paper 1 Markets and Market Failure Wednesday 15 May 2024 Materials For this paper you must have:  an AQA 12-page answer book  a calculator. Instructions Morning Time allowed: 2 hours  Use black ink or black ball-point pen. Pencil should only be used for drawing.  Write the information required on the front cover of your answer book. The Paper Reference is 7136/1.  In Section A, answer EITHER Context 1 OR Context 2.  In Section B, answer ONE essay. Information  The marks for questions are shown in brackets.  The maximum mark for this paper is 80.  There are 40 marks for Section A and 40 marks for Section B. Advice  You are advised to spend 1 hour on Section A and 1 hour on Section B. IB/G/Jun24/G4001/E11 7136/1 A-level Economics Paper 1 – Markets and Market Failure Key Areas to Revise for May 2025 Overview: Paper 1 focuses on the fundamental economic concepts of markets, demand and supply, and market failure. You’ll need to demonstrate an understanding of how markets operate, factors that influence supply and demand, and the causes and consequences of market failure. Additionally, you will explore how government interventions aim to address these failures. Key areas include price determination, elasticity, externalities, and public goods, among others. Key Areas to Revise: 1. Basic Economic Concepts:  Scarcity and Choice: o Understand the basic economic problem of scarcity: limited resources vs unlimited wants. o Be familiar with the concept of opportunity cost—the cost of the next best alternative foregone when making a decision.  Factors of Production: o Study the four factors of production: land, labor, capital, and entrepreneurship, and how they contribute to the production process. 2. The Price Mechanism and Market Forces:  Supply and Demand: o Review how supply and demand curves work and how equilibrium prices and quantities are determined in a market. o Understand the law of demand (price increases, demand decreases) and the law of supply (price increases, supply increases).  Shifts in Supply and Demand: o Be able to explain what causes shifts in the demand and supply curves (e.g., changes in income, tastes, technology, and production costs). o Understand how the market responds to these shifts and how price and quantity are affected.  Price Elasticity of Demand (PED): o Understand how to calculate PED and interpret the result (elastic, inelastic, unitary elasticity). o Know factors that influence PED, such as the availability of substitutes and necessity vs luxury goods.  Price Elasticity of Supply (PES): 3. Market Failure: 4. Government Intervention in Markets: 5. Market Structures: 6. Efficiency and Welfare: 7. Application of Theories and Diagrams:  Diagrams and Analysis: o Be able to draw and interpret diagrams for supply and demand, market equilibrium, and shifts in the curves. o Know how to use diagrams to illustrate the effects of taxes, subsidies, externalities, and market failure.  Case Studies: o Study real-world examples of market failure and government intervention, such as pollution, smoking, education, healthcare, and energy markets. o Be prepared to apply theoretical concepts to case studies, demonstrating how government policies address market failure. IB/G/Jun24/G4001/E11 7136/1 2 IB/G/Jun24/7136/1 Section A Answer EITHER Context 1 OR Context 2. EITHER Context 1 Total for this context: 40 marks The market for university accommodation Study Extracts A, B and C and then answer all parts of Context 1 which follow. Extract A Table 1: Average weekly university rent, selected UK cities, 2015 and 2021 Selected UK cities Average weekly university rent, 2015 Average weekly university rent, 2021 Birmingham £113.88 £157.94 Brighton £143.00 £235.93 Bristol £141.58 £184.38 Liverpool £112.97 £136.61 Manchester £120.87 £180.60 UK average £121.16 £169.35 Source: Cushman Wakefield Student Accommodation Report, 2022 Figure 1: Number of full-time students at UK universities, and type of accommodation, 2015 to 2021 Extract B: A serious shortage of student accommodation The number of 18-year-olds in the UK applying to university is rising. In addition, there was a record number of 277 000 foreign students in 2022. Universities have expanded the number of places on offer to students, but the supply of student accommodation is highly inelastic. Providers of rental accommodation have been deterred by stricter rules on shared houses, higher taxes and greater rights for renters. Rising construction costs, interest rates and inflation have resulted in an insufficient number of new developments in many university cities. Supply shortages have been particularly acute in some cities, and certain universities have asked students to live at home. Shortages of accommodation could mean that some students are discouraged from applying to university. The average private sector rent outside London consumes almost three-quarters of the maximum student loan, and most students are ineligible for this maximum. Some of the top universities may become out of reach to poorer students who do not live locally. 5 10 Source: News reports, 2023 3 Extract C: Policies to solve the shortage of student accommodation The causes of the shortage of student accommodation are varied and some, but not all, result from market failure. Rising rents ought to incentivise more supply, but that has not worked recently. Planning restrictions have limited the number of new building projects. Relaxing such rules might help, but local residents complain that high numbers of students can alter the nature of their communities. Subsidies to the builders of student accommodation could increase supply, but with a likely delay of many years. Some students have been offered financial incentives to defer their entry by a year or to live at home. To reduce further the demand for student accommodation, some people have urged the government to restrict foreign student numbers. However, the 22% of students who are foreign pay 44% of all tuition fees and so subsidise costs for UK students. Policies to tackle high rents could include rent subsidies from the government or an increase in the grants and loans available to students. In Scotland, university students have benefited from controls which limit rent increases to a fixed percentage each year. The National Union of Students is calling for nationwide rent controls. A maximum rent can help keep the cost of student accommodation lower than it would otherwise be, but risks some landlords withdrawing from the market. Some argue that high-quality student accommodation is a merit good and ought to be provided by the government at a fair rent. 5 10 15 Source: News reports, 2023 0 1 Inflation resulted in a basket of goods and services that cost £100 in 2015 costing £112 in 2021. Using this information and the data in Extract A (Table 1), calculate the percentage increase in average university rent, in real terms, between 2015 and 2021. Give your answer to one decimal place. [2 marks] 0 2 Explain how the data in Extract A (Figure 1 and Table 1) show that the supply of university and private rental accommodation has failed to match the increase in student numbers between 2015 and 2021. [4 marks] 0 3 Extract B (lines 3–4) states that ‘Universities have expanded the number of places on offer to students, but the supply of student accommodation is highly inelastic’. With the help of a diagram, explain the impact of the increase in the number of students attending university on the market for student accommodation. [9 marks] 0 4 Extract C (lines 14–16) states that ‘A maximum rent can help keep the cost of student accommodation lower than it would otherwise be, but risks some landlords withdrawing from the market’. Using the data in the extracts and your knowledge of economics, discuss the advantages and disadvantages of policies the government might introduce to improve the market for student accommodation. [25 marks] IB/G/Jun24/7136/1 Turn over ► 4 Do NOT answer Context 2 if you have answered Context 1. OR Context 2 Trade union membership and industrial disputes Total for this context: 40 marks Study Extracts D, E and F and then answer all parts of Context 2 which follow. Extract D Table 2: Trade union membership, % of workforce, 2001 to 2021 Year All employees Private sector 2001 29.3 18.4 Public sector 2006 59.7 28.3 16.6 2011 58.7 26.0 14.2 2016 56.6 23.5 13.4 2021 52.8 23.1 12.8 50.1 Source: Department for Business, Energy and Industrial Strategy, 2022 Figure 2: Growth in average annual nominal earnings, %, January 2015 to September 2022 Source: Office for National Statistics, 2023 Extract E: UK public sector workers hit hardest by cost of living crisis In November 2022, members of nursing trade unions voted to strike. Many more public sector unions have joined the nurses on strike, in attempts to gain pay rises that keep up with inflation. It is notable that many of the employers facing strike action, such as the NHS, are monopsonistic employers, who have considerable labour market power. UK public sector workers have been particularly hard hit by the cost of living crisis, according to official figures that show the gap between public and private sector pay growth is at its widest on record. Annual growth in pay was 6.6% in the private sector in September 2022, compared with just 2.2% for the public sector. Overall, pay growth accelerated to 5.7% as employers struggled to hire workers due to low unemployment. In November 2022, 13.3% of businesses reported experiencing a shortage of workers leading to upward pressure on wages. The construction and hospitality sectors were worst affected. However, wage growth has not kept pace with inflation, which reached 10.1% in September 2022, leading to growing industrial unrest. Until recently, strikes largely affected local authorities, transport services and some private sector employers. But the latest figures show the pay squeeze has been far worse for teachers, NHS staff and other public sector workers who have started to take industrial action, including strikes. Louise Murphy, economist at the Resolution Foundation, said there was now a “huge wedge” between private and public sector pay, creating severe difficulties for public sector recruitment and retention. Staff shortages in the public sector are likely to worsen unless public sector pay and working conditions improve. IB/G/Jun24/7136/1 5 10 15 Source: News reports, 2023 5 Extract F: The role of trade unions Over the past century, British unions have successfully campaigned for a minimum wage, holiday and sickness pay, equal opportunity rights, maternity and paternity rights and a two-day weekend for workers. Unions support individual workers in workplace disagreements, and engage in collective bargaining on behalf of their members by negotiating with employers on pay and working conditions. But unions can do much more for employees and even for employers. Research shows that their benefits can include reducing staff turnover, providing or promoting training and encouraging innovation. UK trade union membership peaked at 13.2 million members in 1979 but fell consistently during the 1980s and 1990s. There has been a recent reversal of this trend with membership increasing in each of the last four years, primarily amongst public sector workers. Unions suggest that new members have been joining due to wages falling in real terms, and the hope that a trade union might protect their interests. Collective pay bargaining, reinforced by the threat of strikes, has achieved some notable successes for workers, such as the 18% pay rise for London bus drivers in February 2023. However, 205 000 working days were lost to strike action in September 2022, almost as many as in the whole of 2019. Critics argue that strikes by transport workers, teachers, nurses and others create enormous disruption for everybody else and make labour markets less efficient. 5 10 15 Source: News reports, 2023 0 5 Using the data in Extract D (Table 2), calculate the difference between the mean percentage trade union membership in the private sector and the mean percentage trade union membership in the public sector over the period 2001–2021. Give your answer to one decimal place. [2 marks] 0 6 Explain how the data in Extract D (Figure 2), show that, since 2015, living standards of people working in the private sector are likely to have increased compared to those working in the public sector. [4 marks] 0 7 Extract E (lines 9–10) states that ‘In November 2022, 13.3% of businesses reported experiencing a shortage of workers leading to upward pressure on wages’. With the help of a diagram, explain how and to what extent a shortage of labour is likely to affect the wage in a competitive labour market. [9 marks] 0 8 Extract F (lines 12–13) states that ‘Collective pay bargaining, reinforced by the threat of strikes, has achieved some notable successes for workers’. Using the data in the extracts and your knowledge of economics, evaluate the view that trade unions improve the operation of labour markets by protecting the interests of workers. [25 marks] IB/G/Jun24/7136/1 Turn over ► 6 Section B Answer one essay from this section. Each essay carries 40 marks. EITHER Essay 1 In the UK, 64% of the population are considered to be overweight. Many policies have focused on promoting active lifestyles, whilst taxes have been introduced on sugary drinks and alcohol. There has also been regulation of advertising aimed at young children. Attention has recently turned to the use of behavioural economics techniques to change diets. 0 9 Explain why imperfect and asymmetric information may lead to market failure in the market for food. [15 marks] 1 0 Evaluate the view that the consumption of unhealthy foods can best be reduced through the use of nudges and other techniques from behavioural economics. [25 marks] OR Essay 2 In 2018, the Competition and Markets Authority issued a report which criticised a ‘situation where businesses charge higher prices to existing customers who stay with them, than they do to new customers’. However, according to Citizens Advice, some broadband and mobile phone companies continue to charge existing customers more than they charge new customers. 1 1 Explain the likely impact on consumer surplus and producer surplus as an industry moves away from a competitive market structure to one that is dominated by a few large firms. [15 marks] 1 2 Evaluate the view that price discrimination is damaging for consumers. [25 marks] IB/G/Jun24/7136/1 7 OR Essay 3 Britain’s energy market was plunged into chaos in 2021 as surges in wholesale electricity and gas prices exposed the weaknesses of many companies. Since deregulation in 2016, 49 energy supply companies have collapsed, with customers taken on by larger firms. This market chaos has led to renewed calls for the government to nationalise the energy industry. 1 3 Explain, using examples, how the existence of economies and diseconomies of scale affect firms’ average costs of production. [15 marks] 1 4 Assess the view that privatised industries, such as electricity and gas, should be taken back into public ownership. [25 marks] END OF QUESTIONS IB/G/Jun24/7136/1 8 IB/G/Jun24/7136/1 There are no questions printed on this page Copyright information For confidentiality purposes, all acknowledgements of third-party copyright material are published in a separate booklet. This booklet is published after each live examination series and is available for free download from . Permission to reproduce all copyright material has been applied for. In some cases, efforts to contact copyright-holders may have been unsuccessful and AQA will be happy to rectify any omissions of acknowledgements. If you have any queries please contact the Copyright Team. Copyright © 2024 AQA and its licensors. All rights reserved. A-level ECONOMICS 7136/1 Paper 1 Markets and Market Failure Mark scheme June 2024 Version: 1.0 Final MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 Mark schemes are prepared by the Lead Assessment Writer and considered, together with the relevant questions, by a panel of subject teachers. This mark scheme includes any amendments made at the standardisation events which all associates participate in and is the scheme which was used by them in this examination. The standardisation process ensures that the mark scheme covers the students’ responses to questions and that every associate understands and applies it in the same correct way. As preparation for standardisation each associate analyses a number of students’ scripts. Alternative answers not already covered by the mark scheme are discussed and legislated for. If, after the standardisation process, associates encounter unusual answers which have not been raised they are required to refer these to the Lead Examiner. It must be stressed that a mark scheme is a working document, in many cases further developed and expanded on the basis of students’ reactions to a particular paper. Assumptions about future mark schemes on the basis of one year’s document should be avoided; whilst the guiding principles of assessment remain constant, details will change, depending on the content of a particular examination paper. No student should be disadvantaged on the basis of their gender identity and/or how they refer to the gender identity of others in their exam responses. A consistent use of ‘they/them’ as a singular and pronouns beyond ‘she/her’ or ‘he/him’ will be credited in exam responses in line with existing mark scheme criteria. Further copies of this mark scheme are available from Copyright information AQA retains the copyright on all its publications. However, registered schools/colleges for AQA are permitted to copy material from this booklet for their own internal use, with the following important exception: AQA cannot give permission to schools/colleges to photocopy any material that is acknowledged to a third party even for internal use within the centre. Copyright © 2024 AQA and its licensors. All rights reserved. 2 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 Level of response marking instructions Level of response mark schemes are broken down into levels, each of which has a descriptor. The descriptor for the level shows the average performance for the level. There are marks in each level. Before you apply the mark scheme to a student’s answer read through the answer and annotate it (as instructed) to show the qualities that are being looked for. You can then apply the mark scheme. Step 1 Determine a level Start at the lowest level of the mark scheme and use it as a ladder to see whether the answer meets the descriptor for that level. The descriptor for the level indicates the different qualities that might be seen in the student’s answer for that level. If it meets the lowest level then go to the next one and decide if it meets this level, and so on, until you have a match between the level descriptor and the answer. With practice and familiarity you will find that for better answers you will be able to quickly skip through the lower levels of the mark scheme. When assigning a level you should look at the overall quality of the answer and not look to pick holes in small and specific parts of the answer where the student has not performed quite as well as the rest. If the answer covers different aspects of different levels of the mark scheme you should use a best fit approach for defining the level and then use the variability of the response to help decide the mark within the level, ie if the response is predominantly level 3 with a small amount of level 4 material it would be placed in level 3 but be awarded a mark near the top of the level because of the level 4 content. Step 2 Determine a mark Once you have assigned a level you need to decide on the mark. The descriptors on how to allocate marks can help with this. The exemplar materials used during standardisation will help. There will be an answer in the standardising materials which will correspond with each level of the mark scheme. This answer will have been awarded a mark by the Lead Examiner. You can compare the student’s answer with the example to determine if it is the same standard, better or worse than the example. You can then use this to allocate a mark for the answer based on the Lead Examiner’s mark on the example. You may well need to read back through the answer as you apply the mark scheme to clarify points and assure yourself that the level and the mark are appropriate. Indicative content in the mark scheme is provided as a guide for examiners. It is not intended to be exhaustive and you must credit other valid points. Students do not have to cover all of the points mentioned in the Indicative content to reach the highest level of the mark scheme. An answer which contains nothing of relevance to the question must be awarded no marks. 3 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 4 Section A Below is the levels of response marking grid to be used when marking any 25-mark question. Level of response Response Max 25 marks 5 Sound, focused analysis and well-supported evaluation that:  is well organised, showing sound knowledge and understanding of economic terminology, concepts and principles with few, if any, errors  includes good application of relevant economic principles to the given context and, where appropriate, good use of data to support the response  includes well-focused analysis with clear, logical chains of reasoning  includes supported evaluation throughout the response and in a final conclusion. 21–25 marks 4 Sound, focused analysis and some supported evaluation that:  is well organised, showing sound knowledge and understanding of economic terminology, concepts and principles with few, if any, errors  includes some good application of relevant economic principles to the given context and, where appropriate, some good use of data to support the response  includes some well-focused analysis with clear, logical chains of reasoning  includes some reasonable, supported evaluation. 16–20 marks 3 Some reasonable analysis but generally unsupported evaluation that:  focuses on issues that are relevant to the question, showing satisfactory knowledge and understanding of economic terminology, concepts and principles but some weaknesses may be present  includes reasonable application of relevant economic principles to the given context and, where appropriate, some use of data to support the response  includes some reasonable analysis but which might not be adequately developed or becomes confused in places  includes fairly superficial evaluation; there is likely to be some attempt to make relevant judgements but these aren’t well-supported by arguments and/or data. 11–15 marks 2 A fairly weak response with some understanding that:  includes some limited knowledge and understanding of economic terminology, concepts and principles is shown but some errors are likely  includes some limited application of relevant economic principles to the given context and/or data to the question  includes some limited analysis but it may lack focus and/or become confused  includes some evaluation which is weak and unsupported. 6–10 marks 1 A very weak response that:  includes little relevant knowledge and understanding of economic terminology, concepts and principles  includes application to the given context which is, at best, very weak  includes attempted analysis which is weak and unsupported. 1–5 marks MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 Section A Context 1 Total for this context: 40 marks 0 1 Inflation resulted in a basket of goods and services that cost £100 in 2015 costing £112 in 2021. Using this information and the data in Extract A (Table 1), calculate the percentage increase in average university rent, in real terms, between 2015 and 2021. Give your answer to one decimal place. Calculation: Cost of average rent in 2015 at 2021 prices: 121.16 X 1.12 = 135.6992 Increase in real average rent: 169.35 – 135.6992 = 33.6508 % increase in real average rent: 33.6508/135.6992 X 100 = 24.798 Correct answer: 24.8% or Cost of average rent in 2021 at 2015 prices: 169.35/1.12 = 151.205 Increase in real average rent: 151.205 - 121.16 = 30.045 % increase in real average rent: 30.045/121.16 X 100 = 24.798 Correct answer: 24.8% or 169.35/121.16 X 100/112 = 1.24798 then subtract 1 and multiply by 100 Response [2 marks] For the correct answer, to one decimal place, with % sign: 24.8% Max 2 marks For the correct answer but without the % sign and/or not to one decimal place: eg 24.8 or 24.798% 2 marks OR For the correct method, but the wrong answer, to one decimal place, with the % sign OR 1 mark For subtracting 12 from 39.8 to get 27.8% MAXIMUM FOR QUESTION 01: 2 MARKS 5 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 0 2 Explain how the data in Extract A (Figure 1 and Table 1) show that the supply of university and private rental accommodation has failed to match the increase in student numbers between 2015 and 2021. [4 marks] Response  Includes evidence that shows that the supply of university and private rental accommodation has failed to match the increase in student numbers.  Clearly explains how this data is evidence that the supply of university and private rental accommodation has failed to match the increase in student numbers. Max 4 marks 4 marks  Includes evidence that shows that the supply of university and private rental accommodation has failed to match the increase in student numbers.  Explanation of how this data is evidence that the supply of university and private rental accommodation has failed to match the increase in student numbers. 3 marks  Includes some evidence that shows that the supply of university and private rental accommodation has failed to match the increase in student numbers.  Limited explanation of how this data is evidence that the supply of university and private rental accommodation has failed to match the increase in student numbers. 2 marks  Includes evidence that does not clearly show that the supply of university and private rental accommodation has failed to match the increase in student numbers.  No explanation of how this data is evidence that the supply of university and private rental accommodation has failed to match the increase in student numbers. 1 mark Relevant issues include:  total student numbers have increased from approximately 1.7 million to 2.1 million in the period, an increase of 24%  university rental properties have barely changed at all, hovering around the 330 000 level  private rental properties have increased slightly, from 650 000 to 750 000  the shortfall of around 300 000 is accounted for by the increase in students living at home, from 750 000 to just over 1 million  Table 1 shows that the nominal cost of university rent has risen by 39.8% (allow 24.8% increase in real terms) from £121.16 to £169.35  the rise in rents indicates that the supply of university and private rental accommodation has not matched the increased demand as reflected in the increase in student numbers. Allow a margin of error of +/- 100 000 MAXIMUM FOR QUESTION 02: 4 MARKS 6 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 7 0 3 Extract B (lines 3–4) states that ‘Universities have expanded the number of places on offer to students, but the supply of student accommodation is highly inelastic’. With the help of a diagram, explain the impact of the increase in the number of students attending university on the market for student accommodation. [9 marks] Level of response Response Max 9 marks 3  Is well organised and develops one or more of the key issues that are relevant to the question.  Shows sound knowledge and understanding of relevant economic terminology, concepts and principles.  Includes good application of relevant economic principles and/or good use of data to support the response.  Includes well-focused analysis with a clear, logical chain of reasoning.  Includes a relevant diagram that will, at the top of this level, be accurate and used appropriately. 7–9 marks 2  Includes one or more issues that are relevant to the question.  Shows reasonable knowledge and understanding of economic terminology, concepts and principles but some weaknesses may be present.  Includes reasonable application of relevant economic principles and/or data to the question.  Includes some reasonable analysis but it might not be adequately developed and may be confused in places.  May include a relevant diagram. 4–6 marks 1  Is very brief and/or lacks coherence.  Shows some limited knowledge and understanding of economic terminology, concepts and principles but some errors are likely.  Demonstrates very limited ability to apply relevant economic principles and/or data to the question.  May include some very limited analysis but the analysis lacks focus and/or becomes confused.  May include a relevant diagram but the diagram is not used and/or is inaccurate in some respects. 1–3 marks MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 Expected diagram A supply and demand diagram is expected, showing a shift in demand to the right. It is also expected that the student’s diagram will show an inelastic supply curve. Relevant issues include:  definitions of demand, supply, inelastic supply  explanation of why student numbers are rising o rising numbers of foreign students o demographic change leading to more UK 18-year-olds  explanation of why this leads to an increase in demand for student accommodation o the demand for university places and the demand for student accommodation are complementary  explanation of why supply of student accommodation is inelastic including o planning restrictions o high construction costs, rising interest rates and inflation o time taken to build new accommodation  explanation of why the expected outcome is that prices would rise and rise substantially including o the price (rent) rises because there is excess demand at the original price (rent) o the rationing and/or incentive functions of the price mechanism  explanation of why the expected outcome in terms of quantity is that quantity would increase but only slightly. MAXIMUM FOR QUESTION 03: 9 MARKS 8 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 0 4 Extract C (lines 14–16) states that ‘A maximum rent can help keep the cost of student accommodation lower than it would otherwise be, but risks some landlords withdrawing from the market’. Using the data in the extracts and your knowledge of economics, discuss the advantages and disadvantages of policies the government might introduce to improve the market for student accommodation. [25 marks] Areas for discussion include:  explanation of the market for student accommodation  how a well-functioning market would resolve the shortage of accommodation via incentives, rationing and signalling  the nature of the market failure(s) including o excess demand for university accommodation, high rents affecting social mobility and inequality by pricing some students out of university accommodation o leading to fewer students choosing to go to university, university education as a merit good o high-quality student accommodation as a merit good o poor quality student accommodation as a demerit good o immobility of factors of production (in this case land) can lead to market failure  other problems which are not the result of market failure including o planning restrictions o objections to new accommodation by neighbours  analysis and evaluation of policies to reduce the market failure here including o rent subsidies o rent controls o subsidising builders of student accommodation o state provision of accommodation o reducing planning restrictions o reducing demand for accommodation, eg limits on foreign students o grants and loans to support students with high costs  use of the data in the extracts, particularly Extract C, to support analysis and evaluation of the policies discussed  whether or not the problem of excess demand is likely to persist  the objectives of government policy in this area  market failure arguments  government failure arguments  an overall assessment of the advantages and disadvantages of policies the government might introduce to improve the market for student accommodation. The use of relevant diagrams to support the analysis should be taken into account when assessing the quality of the student’s response to the question. Use the level mark scheme on page 4 to award students marks for this question. MAXIMUM FOR QUESTION 04: 25 MARKS 9 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 Context 2 Total for this context: 40 marks 0 5 Using the data in Extract D (Table 2), calculate the difference between the mean percentage trade union membership in the private sector and the mean percentage trade union membership in the public sector over the period 2001–2021. Give your answer to one decimal place. Mean of private sector trade union membership: (18.4+16.6+14.2+13.4+12.8)/5= 15.08 Mean of public sector trade union membership: (59.7+58.7+56.6+52.8+50.1)/5= 55.58 Difference = 55.58-15.08 = 40.5 percentage points (accept 40.5%) Response [2 marks] For the correct answer, to one decimal place, with % sign: 40.5 percentage points or 40.5% Max 2 marks 2 marks For the correct answer but without the % sign and/or not to one decimal place: eg 40.5 or 40% or 41% OR For the correct method, but the wrong answer, to one decimal place, with the % sign 1 mark MAXIMUM FOR QUESTION 05: 2 MARKS 10 MARK SCHEME – A-LEVEL ECONOMICS – 7136/1 – JUNE 2024 11 0 6 Explain how the data in Extract D (Figure 2) show that, since 2015, living standards of people working in the private sector are likely to have increased compared to those working in the public sector. [4 marks] Response Max 4 marks  Includes evidence that shows why living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015.  Clearly explains how this data is evidence that the living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015. 4 marks  Includes evidence that shows why living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015.  Explanation of how this data is evidence that the living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015. 3 marks  Includes some evidence that shows why living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015.  Limited explanation of how this data is evidence that the living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015. 2 marks  Includes evidence that does not clearly show why living standards of people working in the private sector are likely to have increased compared to those working in the public sector since 2015.  No explanation of how this data is evidence that the livi