Cambridge International AS & A Level

ECONOMICS 9708/42
Paper 4 A Level Data Response and Essays
February/March 2024
MARK SCHEME
Maximum Mark: 60

Final Mark Scheme

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9708/42 Cambridge International AS & A Level – Mark Scheme February/March 2024
Final Mark Scheme

Generic Marking Principles

These general marking principles must be applied by all examiners when marking candidate answers.
They should be applied alongside the specific content of the mark scheme or generic level descriptors
for a question. Each question paper and mark scheme will also comply with these marking principles.

GENERIC MARKING PRINCIPLE 1:

Marks must be awarded in line with:

 the specific content of the mark scheme or the generic level descriptors for the question
 the specific skills defined in the mark scheme or in the generic level descriptors for the
question
 the standard of response required by a candidate as exemplified by the standardisation scripts.
GENERIC MARKING PRINCIPLE 2:

Marks awarded are always whole marks (not half marks, or other fractions).
GENERIC MARKING PRINCIPLE 3:

Marks must be awarded positively:

 marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit
is given for valid answers which go beyond the scope of the syllabus and mark scheme,
referring to your Team Leader as appropriate
 marks are awarded when candidates clearly demonstrate what they know and can do
 marks are not deducted for errors
 marks are not deducted for omissions
 answers should only be judged on the quality of spelling, punctuation and grammar when
these features are specifically assessed by the question as indicated by the mark scheme. The
meaning, however, should be unambiguous.
GENERIC MARKING PRINCIPLE 4:

Rules must be applied consistently, e.g. in situations where candidates have not followed
instructions or in the application of generic level descriptors.
GENERIC MARKING PRINCIPLE 5:

Marks should be awarded using the full range of marks defined in the mark scheme for the question
(however; the use of the full mark range may be limited according to the quality of the candidate
responses seen).
GENERIC MARKING PRINCIPLE 6:

Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should
not be awarded with grade thresholds or grade descriptors in mind.

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Guidance on using levels-based mark schemes

Marking of work should be positive, rewarding achievement where possible, but clearly differentiating
across the whole range of marks, where appropriate.

The marker should look at the work and then make a judgement about which level statement is the
best fit. In practice, work does not always match one level statement precisely so a judgement may
need to be made between two or more level statements.

Once a best-fit level statement has been identified, use the following guidance to decide on a specific
mark:

 If the candidate’s work convincingly meets the level statement, award the highest mark.
 If the candidate’s work adequately meets the level statement, award the most appropriate mark
in the middle of the range (where middle marks are available).
 If the candidate’s work just meets the level statement, award the lowest mark.

Social Sciences and Humanities Subject Specific Marking Principles

(for point-based marking)

1 Components using point-based marking:

 Point marking is often used to reward knowledge, understanding and application of skills.
We give credit where the candidate’s answer shows relevant knowledge, understanding
and application of skills in answering the question. We do not give credit where the answer
shows confusion.

From this it follows that we:

a DO credit answers which are worded differently from the mark scheme if they clearly convey
the same meaning (unless the mark scheme requires a specific term)
b DO credit alternative answers/examples which are not written in the mark scheme if they are
correct
c DO credit answers where candidates give more than one correct answer in one prompt/
numbered/scaffolded space where extended writing is required rather than list-type answers.
For example, questions that require n reasons (e.g. State two reasons …)
d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required.
(Check for evidence it is understood and not used wrongly)
e DO NOT credit answers which are obviously self-contradicting or trying to cover all
possibilities, e.g. a scattergun approach to a question asking for n items
f DO NOT give further credit for what is effectively repetition of a correct point already credited
unless the language itself is being tested. This applies equally to ‘mirror statements’ (i.e.
polluted/not polluted)
g DO NOT require spellings to be correct, unless this is part of the test. However spellings of
syllabus terms must allow for clear and unambiguous separation from other syllabus terms
with which they may be confused (e.g. Corrasion/Corrosion)

2 Presentation of mark scheme:

 Slashes (/) or the word ‘or’ separate alternative ways of making the same point.
 Semi colons (;) bullet points () or figures in brackets (1) separate different points.
 Content in the answer column in brackets is for examiner information/context to clarify the
marking but is not required to earn the mark (except Accounting syllabuses where they
indicate negative numbers).

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3 Annotation:
 For point marking, ticks can be used to indicate correct answers and crosses can be used to
indicate wrong answers. There is no direct relationship between ticks and marks. Ticks have
no defined meaning for levels of response marking.
 For levels of response marking, the level awarded should be annotated on the script.
 Other annotations will be used by examiners as agreed during standardisation, and the
meaning will be understood by all examiners who marked that paper.

Assessment objectives

AO1 Knowledge and understanding

 Show knowledge of syllabus content, recalling facts, formulae and definitions.
 Demonstrate understanding of syllabus content, giving appropriate explanations and examples.
 Apply knowledge and understanding to economic information using written, numerical and
diagrammatic forms.

AO2 Analysis
 Examine economic issues and relationships, using relevant economic concepts, theories and
information.
 Select, interpret and organise economic information in written, numerical and diagrammatic form.
 Use economic information to recognise patterns, relationships, causes and effects.
 Explain the impacts and consequences of changes in economic variables.

AO3 Evaluation
 Recognise assumptions and limitations of economic information and models.
 Assess economic information and the strengths and weaknesses of arguments.
 Recognise that some economic decisions involve consideration of factors such as priorities and
value judgements.
 Communicate reasoned judgements, conclusions and decisions, based on the arguments.

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Final Mark Scheme

Table A: AO1 Knowledge and understanding and AO2 Analysis

Use this table to give marks for each candidate response for AO1 Knowledge and understanding and
AO2 Analysis for Questions 2, 3, 4 and 5.

Level Description Marks

3  A detailed knowledge and understanding of relevant economic concepts 11–14
is included, using relevant explanations. Explanations are supported by
examples, where appropriate.

 The response clearly addresses the requirements of the question and

explains economic issues, and fully develops these explanations.

 Analysis is developed and detailed and makes accurate and relevant use of
economic concepts and theories. Where necessary, there is accurate and
relevant use of analytical tools such as diagrams and formulae, and these
are fully explained.

 Responses are well-organised, well-focused and presented in a logical and

coherent manner.
2  Knowledge and understanding of some relevant economic concepts is 6–10
included, using explanations and examples that are limited, over-generalised
or contain inaccuracies.

 The response addresses the general theme of the question and the relevant
economic issues, with limited development.

 Analysis is generally accurate with some development but little detail. Uses
analytical tools such as diagrams and formulae where necessary. Use of
these tools is partially accurate or not fully explained.

 Responses are generally logical and coherent but are sometimes lacking in
focus or organisation.
1  A small number of relevant knowledge points are included and the response 1–5
is limited by significant errors or omissions.

 The response has little relevance to the question.

 Analysis where provided is largely descriptive. Use of analytical tools such as

diagrams and formulae, where necessary, may contain significant errors or
be omitted completely.

 Responses show limited organisation of economic ideas.

0 No creditable response. 0

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Table B: AO3 Evaluation

Use this table to give marks for each candidate response for AO3 Evaluation for Questions 2, 3, 4
and 5.

Level Description Marks

2  Provides a justified conclusion or judgement that addresses the specific 4–6
requirements of the question.

 Makes developed, reasoned and well-supported evaluative comment(s).

1  Provides a vague or general conclusion or judgement in relation to the 1–3
question.

 Makes simple evaluative comment(s) with no development and little

supporting evidence.
0 No creditable response. 0

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Final Mark Scheme

Section A Data response

Question Answer Marks

Mark Scheme
1(a) Identify what caused the rise in the electricity prices and explain 5
whether it can be concluded from the article that the price rise was an
example of market failure.
natural gas supply shortage 1mk; breakdown of nuclear reactors 1mk;
Market failure occurs when price mechanism fails to account for all of the
costs and benefits necessary to determine price equilibrium and this results in
allocative inefficiency (accept alternative definitions of market failure).
2mksThere is no evidence of allocative inefficiency and no market failure
(accept either) 1mk

 Is there any evidence in the article that the French government’s

1(b) 4
decisions will increase competition or efficiency in the energy market?
competitors got cheaper electricity, so this maybe increase competition 1mk
alternative renewable energy projects were stopped, so possibly leading to
less efficiency 1mk.five reactors were forced to close due to poor
maintenance and becoming less efficient 1mk
conclusion: some evidence of increasing competition, no evidence of
increasing efficiency 1mk. Accept fall in monopoly profits might lead to a fall
in dynamic efficiency 1mk 4 marks MAX
1(c)(i) Distinguish between equality and equity. 3
Economic equality is the equal distribution of income, wealth in society. 1mk
plus Imk for further development.
Equity is fairness/justice particularly in regard to welfare economics. 1mk plus
1mk for furtherenabled
- the reactors development.
self-sufficiency so this is now less likely

3marks MAX

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Question Answer Marks

1(c)(ii) Consider whether the actions of the French government on electricity 8
prices might be thought to increase either equality or equity for
consumers and producers.
cannot show that changes in price are linked to any notion of fairness, in
relation to producer 1mk. Therefore, producer equity will be unaffected 1mk. A
tax cut might increase consumer equity 1mk. Explanation 1mk
equality possibly, consumer rescued from excessive price increase 1mk but as
both rich and poor consumer benefit it is not conclusive that consumer equality
is improved 1mk
producer small firms will get cheaper electricity at the expense of large firms
and this suggests an increase in equality between producers might be
obtained 2mks
However, a cut in electricity taxes might benefit the large electricity company
more than its smaller rivals, therefore any conclusion on the impact of equality
for producers might remain uncertain. 2mks 8 marks MAX

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Final Mark Scheme

Section B Microeconomics essay

Question Answer Marks

EITHER
2 With the help of a diagram, assess the effectiveness of a 20
government’s intervention in the price mechanism to address the
causes of climate change.

Use Table A: AO1 Knowledge and understanding and AO2 Analysis and
Table B: AO3 Evaluation to mark candidate responses to this question.

AO1 and AO2 out of 14 marks.

AO3 out of 6 marks.

Indicative content

Responses may include:

Mark scheme
AO1 Knowledge and understanding and AO2 Analysis (14 marks max)

● An explanation of the link between climate change and negative

externalities.

● Explanation of negative externalities

● Recognition that negative externalities can be caused by production or

consumption.

● Use of a diagram to show the links between climate change and negative
externalities

● Analysis of how market forces can be used to address the consequences of

climate change.

L2 Max if no accurate diagram provided.

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Question Answer Marks

2 AO3 Evaluation (6 marks max)

 The link between climate change on negative externalities is very difficult

to accurately establish

 It is also extremely difficult to measure negative externalities

 The use of taxation to influence price and output is unlikely to remove all
negative externalities because it is very difficult to measure the correct
amount of taxation that should be applied.

 The use of minimum prices to reduce negative externalities would only

be partially effective and might have significant effects on firm’s profits
and employment.

 Alternatives to the use of the price mechanism might, in some

circumstance, allow a government to achieve a more precise control of
negative externalities. For example, through the use of a complete ban
of consumption/production.

 A conclusion should be attempted which examines the net benefits of

each alternative ie through direct government intervention or through the
use of market forces.

Accept all valid responses.

AO1 Knowledge and understanding and AO2 Analysis 14

AO3 Evaluation 6

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Final Mark Scheme

Question Answer Marks

OR
3 The introduction of a trade union into a perfectly competitive labour 20
market will always lead to higher wage levels and a higher level of
unemployment.

With the help of a diagram, evaluate this statement.

Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table
B: AO3 Evaluation to mark candidate responses to this question.

AO1 and AO2 out of 14 marks. AO3 out of 6 marks.

Indicative content

Responses may include:

Mark scheme
AO1 Knowledge and understanding and AO2 Analysis (14 marks max)

● Characteristics of a perfectly competitive labour market should be

described.

● The role and main aims of a Trades Union should be outlined, emphasizing
the importance of their role in wage bargaining

● A diagram should be provided which shows how wages are determined in a

perfectly competitive labour market and how this impacts upon the wage and
level of employment within each firm

● Analysis should discuss alternative ways in which a Trades Union might

affect wages and employment. References might be made to factors which
affect both the supply of and demand for labour.

● Analysis should then be used to determine the extent to which the

intervention of a Trades Union can influence wage and employment levels in
a perfectly competitive labour market.
L2 Max if no accurate diagram provided

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Question Answer Marks

3 AO3 Evaluation (6 marks max)

● In some cases, the introduction of Trades Union might lead to an increase in

the productivity of the workforce through the provision of better training.
Although an increase in productivity might also be produced by substituting
capital for labour which might lead to an increase in unemployment.

● Trades Unions might gain higher wages for labour but because this makes
capital relatively cheaper, machines might be substituted for labour which will
further reduce employment.

● The impact of higher wages on employment will also depend upon how easy
it is to substitute capital for labour and the existing proportion of capital to
labour in the particular industry.

● If Trades Unions manage to bargain for higher wages but the new wage is
above the market equilibrium, there will be an excess supply of labour at the
new wage leading to higher unemployment. The extent of this impact will be
determined by the relative elasticities of supply of and demand for labour

● A conclusion should attempt to address each element of the statement. The

key word ‘always’ should be considered in the light of the preceding argument.

Accept all valid responses.

AO1 Knowledge and understanding and AO2 Analysis 14

AO3 Evaluation 6

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Section C Macroeconomics essay

Question Answer Marks

EITHER
4 With the help of a diagram, assess the effectiveness of government 20
policies which might be used to reduce cost push inflation.

Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table
B: AO3 Evaluation to mark candidate responses to this question.

AO1 and AO2 out of 14 marks. AO3 out of 6 marks.

Indicative content
Mark scheme
AO1 Knowledge and understanding and AO2 Analysis (14 marks max)

● A clear outline of different causes inflation and why inflation might cause
problems.

● A more detailed explanation of the causes of cost push inflation, supported

by an accurately labelled diagram

● A description of alternative policies that a government might use to reduce

cost push inflation

● Analysis can be used to show how a government will be able to increase

aggregate supply, in the long term, by increasing productivity through direct
investment. For example, by increasing expenditure on
education/infrastructure. This analysis might also be supported by a relevant
diagram

● In the short term, a government might focus on attempting to reduce the

cost of producing goods and services by introducing widespread subsidies,
reducing indirect taxation, removing tariffs on key imports or the use of
incomes policies.
L2 Max if no accurate diagram provided
Must refer to some supply side polices to gain L3 mark

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Question Answer Marks

4 AO3 Evaluation (06 marks max)

● Increasing the use of subsidies and/or decreasing the use of indirect

taxation is likely to have a negative effect on a government’s budget. For
example, increasing the budget deficit and subsequently increasing the need
for more government borrowing.

● Removing tariffs is likely to have a negative effect on the incomes and

output of domestic producers and possibly lead to an increase in
unemployment

● The introduction of incomes policies is likely to lead to opposition from

Trades Unions and the possibility of industrial disruption.

● Long run supply-side policies are likely to focus on attempts to increase

productivity. This frequently involves significant investment in new technology
which will lead to a rise in unemployment in the short run

●Other policies which might be used in the long run might include immediate
investment in skills training and improving the quality of the infrastructure.
Skills training is expensive and hence has a high initial opportunity cost. While
the immediate effect of an increase in expenditure on improving the
infrastructure is likely to increase aggregate demand and add to the
inflationary pressure

● A conclusion should attempt to assess the relative effectiveness of each

type of policy approach and consider which approach is likely to be the most
effective in the short run and then compare this with possible outcomes that
might be achieved in the long run.

Accept evaluation relating to demand side policies.

AO1 Knowledge and understanding and AO2 Analysis 14

AO3 Evaluation 6

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Question Answer Marks

OR
5 Globalisation will help to achieve economic growth in high-income 20
economies and this will automatically improve living standards.

Evaluate this statement.

Use Table A: AO1 Knowledge and understanding and AO2 Analysis and Table
B: AO3 Evaluation to mark candidate responses to this question.

AO1 and AO2 out of 14 marks. AO3 out of 6 marks.

Indicative content

Responses may include:

Mark scheme
AO1 Knowledge and understanding and AO2 Analysis (14 marks max)

●. Globalization would promote free trade, free movement of capital and

labour and the transfer technology. Cultural and political ties would be
strengthened.

● Key characteristics of high-income countries would include: high levels of

productivity; high GDP per capita; significant dependence on producing and
exporting secondary/tertiary goods/services.

● High living standards are generally associated with: low poverty levels;
advanced infrastructure; good housing, education and health; and low infant
mortality rates.

●Economic growth is usually measured by changes in real GDP per capita in

a specific time period.

● An improvement in living standards is very closely linked with an

improvement in economic performance. An improvement in economic
performance is measured by increases in GDP per capita.

● Globalization through trade and technology transfer should provide

opportunities to create more real wealth.

● Higher levels of tax revenue are likely to be received by a high-income

country’s government. This will enable more expenditure on health, housing
and education as well as increased access to more consumer goods. These
improvements are generally associated with a rise in the standard of living.

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Question Answer Marks

5 AO3 Evaluation (06 marks max)

● The links between an increase in economic growth and an increase in living

standards are not clear. Economic growth is a quantitative measure not a
qualitative measure

● Economic growth which depends upon globalization would increase long

distance transport which would create more negative externalities.

● It is not clear how any benefits of economic growth might be used in a high-
income economy

● Globalization might lead to an increase in cheap imports from low-income

economies which might lead to higher levels of unemployment in more
advanced economies.

● A conclusion might attempt to form an overall judgement on the short term

and long-term benefits of globalization in relation to the improvement of living
standards in high-income countries. Also a judgement should consider
whether this will automatically improve living standards.

Accept all valid responses.

4 AO1 Knowledge and understanding and AO2 Analysis 14

AO3 Evaluation 6

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