Economics Syllabus overview

0455 IGCSE Economics paper

Question paper Analyse

Paper 1 Multiple choice paper

• Paper 1 45 minutes

• Multiple Choice 30% -30 marks

• Candidates answer all 30 questions

Paper 2-Structured questions

Total marks 90-will take-70%

Candidates answer one compulsory question

and three questions from a choice of four

Duration -2 hours 15 minutes

Assessment Objective

• AO1 Knowledge and understanding

• AO2 Analysis

• AO3 Evaluation

AO1 Knowledge and understanding

show knowledge and understanding of economic definitions, formulas, concepts and theories use economic terminology.

A02 Analyse

select, organise and interpret data

•• use economic information and data to recognise patterns and to deduce relationships

•• apply economic analysis to written, numerical, diagrammatic and graphical data

•• analyse economic issues and situations, identifying and developing links.

AO3 Evaluation

• evaluate economic information and data

• distinguish between economic analysis and unreasoned statements

• recognise the uncertainties of the outcomes of economic decisions and events

• communicate economic thinking in a logical manner.

Assessment objective Weighting in IGCSE %

• AO1 Knowledge and understanding 40

• AO2 Analysis 40

• AO3 Evaluation 20

Assessment objectives as a percentage of each component

• Assessment objective Weighting in components %

• Paper 1 -30% Paper 2 -70%

• AO1 Knowledge and understandingP1 -50 P2-35

• AO2 Analysis P1-50 P2-35

• AO3 Evaluation P1-0 P2- 30

In February 2017, Europe experienced a shortage of fresh vegetables due to bad weather. For a period of time, the markets for a number of vegetables, including broccoli and lettuces, were not in equilibrium. The price of food tends to fluctuate more than the price of manufactured goods and services. These fluctuations influence the rate of inflation.

• a) When is a market in equilibrium? [2]

• (b) Explain how a rise in the price of food would affect a country’s consumer prices in{4]

• (c) Analyse, using a demand and supply diagram, how bad weather is likely to affect the market for broccoli. [6]

• d) Discuss whether or not a higher inflation rate will benefit producers. [8]

a) When is a market in equilibrium? [2]

• When demand equals supply / when there is no pressure for price to change (2). When it is in balance (1).

• 2 marks could be awarded for an accurately

  drawn demand and supply diagram showing equilibrium.

Explain how a rise in the price of food would affect a country’s consumer prices index (CPI).

• CPI is a measure of inflation (1) Demand for food is inelastic / necessity(1)A rise in price of food would cause an increase in inflation / CPI (1). Food is an item in the CPI (1) it has a relatively high weighting (1) people spend a relatively high proportion on food (1) proportion declines as income rises (1)

Analyse, using a demand and supply diagram, how bad weather islikely to affect the market for broccoli.

• Up to 4 marks for the diagram:

  Axes correctly labelled – price and quantity or P and Q (1).Demand andsupply curves correctly labelled (1).

  Supply curve shifted to the left(1).Equilibriums – shown by lines or e.g. E1 and E2 (1).

  
  

• Up to 2 marks for written comments:

  Bad weather will destroy crops / reduce supply of broccoli / quantity tradedfalls (1).Weather is an important influence on the supply of agricultural products /cost of producing broccoli will rise / price will rise (1).

Discuss whether or not a higher inflation rate will benefit producers.

Up to 5 marks for why it might:

Producers may receive higher prices / revenue for their products (1) if costs rise by less (1) profits will rise (1) may encourage investment (1) expand the business (1).Producers may be able to borrow more cheaply (1) the burden of past debts will fall (1) if the rate of inflation is above the rate of interest(1).An inflation rate may rise from a low or negative rate (1) and this would provide a greater incentive for producers(1).Higher inflation rate in other countries (1) will make this country’s products more competitive (1).If demand is inelastic (1) a rise in price will increase revenue (1).Higher inflation will reduce the cost of borrowing (1).

QD Answer

• 
  

  Up to 5 marks it might not:

  If cost of production rises (1) output may fall (1) firms’ profits may fall (1).Producers may have to spend time adjusting prices (1) menu costs (1).A lower and stable rate of inflation (1) may increase the confidence of producers (1).

  Producers may find it more difficult to export abroad / exports may fall (1)lower revenue (1).Producers may find it harder to assess relative prices (1) and so may makeinefficient decisions (1).