Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions February/March 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the February/March 2023 series for most
Cambridge IGCSE™, Cambridge International A and AS Level components and some Cambridge O Level
components.

This document consists of 28 printed pages.

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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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an MAX

illogical line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made

without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy
O
Level 1

Level 2

Level 3

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PREPARATION FOR MARKING

1 Make sure that you have completed the relevant training and have access to the RM Assessor Guide.
2 Make sure that you have read and understand the question paper, which you can download from https://support.rm.com/ca
3 Log in to RM Assessor then mark and submit the required number of practice and standardisation scripts. You will need to mark the
standardisation scripts to the required accuracy in order to be approved for marking live scripts. You may be asked to re-mark them, or to mark
a second sample, if you do not meet the required accuracy on your first attempt.

MARKING PROCESS
1 Mark strictly to the FINAL mark scheme, applying the criteria consistently and the general marking principles outlined on the previous page.
2 If you are in doubt about applying the mark scheme, consult your Team Leader.
3 Mark at a steady rate through the marking period. Do not rush, and do not leave too much until the end. If you anticipate a problem in meeting
the deadline, contact your Team Leader immediately and the Examiners’ Helpdesk.
4 Examiners will prepare a brief report on the performance of candidates to send to their Team Leader via email by the end of the marking
period. The Examiner should note strengths seen in answers and common errors or weaknesses. Constructive comments on the question
paper, mark scheme or procedures are also appreciated.

MARKING SPECIFICS
Crossed out work
1 All a candidate’s answers, crossed out or not, optional or not, must be marked.
2 The only response not to be marked is one that has been crossed out and replaced by another response for that exact same question.
3 Consequently, if a candidate has crossed out their response to an optional question and gone on to answer a different optional question then
both attempts must be marked. The higher mark will be awarded by the system according to the rubric.

0 (zero) marks or NR (no response)

1 Award NR if there is nothing at all written in answer to that question (often the case for optional questions).
2 Award NR if there is a comment which is not an attempt at the question (e.g. ‘can’t do it’ or ‘don’t know’ etc.)
3 Award NR if there is a symbol which is not an attempt at the question, such as a dash or question mark.
4 Award 0 (zero) if there is any attempt at the question which does not score marks. This includes copying the question onto an Answer
Booklet.

Annotation
1 Every question must have at least one annotation e.g. <NAQ> if it is an NR and <X> or <seen> if 0 marks are awarded.
2 Every mark awarded for a question (as shown in the mark input box to the right of the screen) must be indicated by a correctly
positioned tick on the script. The number in the box below the tick annotation must be equal to the mark awarded in the input box.
3 Every page of a script must have at least one annotation e.g. <BP> for a blank page

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Question Answer Marks Guidance

1(a) Calculate the value of US imports from China in 1 Accept the correct figure without the $ sign.
2020. 560 000 000 000.
5.6  10^11
$560bn (1).

1(b) Identify two causes of the increase in the quantity 2 If more than two causes given, consider the first three.
of US factors of production.
Accept increase in labour for increase in the labour force.
Land reclamation (1) increase in the labour force (1).

1(c) Explain one way that import tariffs could improve 2 One mark for a way identified and one mark for an explanation.
the US economy. If more than one way identified, consider the first two.

Could improve the current account / trade in goods / To gain two marks, one mark must come from improving the
trade in goods and services / balance of payments (1) current account, increase output or raise tax revenue.
by reducing imports / making domestic goods more
competitive with imports / raising the price of imports Could raise more revenue is not sufficient – need more tax
(1) revenue or more government revenue / income.
Could increase output / cause economic growth (1) by
increasing demand for US goods / raise employment
(1).
Could raise tax revenue (1) allowing the government
to spend more on (e.g. education) / improve the
(government budget position) (1).

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Question Answer Marks Guidance

1(d) Explain two reasons why the US inflation rate fell 4 One mark each for each of two reasons identified and one mark
in 2020. each for each of two explanations.

Logical explanation which might include: If more than two reasons given, consider the first three.
Fall in consumer expenditure (1) lower total demand /
reduce demand-pull inflation (1). Reduction in bargaining power may also be linked to lower total
Reduction in workers’ bargaining power (1) fall in demand.
wage rises / wages / fall in rise in costs / fall in costs /
reduce cost-push inflation (1).
Higher unemployment (1) reduces confidence / lower
total demand / fall in consumer spending (1).
Fall in (real) GDP (1) lower incomes / purchasing
power / lower total demand (1).
Current account deficit (1) lower total demand / reduce
demand-pull inflation (1).

1(e) Draw a demand and supply diagram to show the 4

effect of an increase in the price of a complement
on the market for ice cream.

Demand and supply diagram:

Axes correctly labelled – price and quantity or p and q
(1).
Original demand and supply curves correctly labelled
(1).
Demand curve shifted to the left (1).
Equilibriums – shown by lines P1 and Q1 and P2 and
Q2 or equilibrium points marked as E1 and E2 (1).

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Question Answer Marks Guidance

1(f) Analyse the relationship between government 5 Alternatively, some candidates may argue that changes in
spending and unemployment. unemployment, could lead to changes in government spending.
Credit both responses.
Coherent analysis which might include:

Overview:
Inverse relationship / negative relationship (1)
generally, the higher government spending, the lower
the unemployment rate (1).

Supporting evidence:
E.g. 2015 to 2019, government spending increased
and unemployment fell / 2015 to 2017 government
spending increased and unemployment fell (1)
processing / interpreting of data e.g. between 2015 to
2019, government spending rose by $700bn and
unemployment fell by 1.6% (points) (1).

Analysis of the expected relationship:

• higher government spending will increase total
demand (encouraging firms to expand and
employ more workers) (1)
• higher government spending may be on e.g.
education, training, infrastructure, subsidies which
could increase workers’ chances of gaining jobs
(1)
• higher employment will provide more tax revenue
for the government to spend / lower employment
will reduce tax revenue for the government to
spend (1).

Exception:
2020 (1) both government spending and
unemployment rose / government spending and
unemployment both at their highest (1).

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Question Answer Marks Guidance

1(f) Analysis of the exception:

• government spending on unemployment benefits
may have increased / rise in government
spending not enough to stop GDP / consumer
expenditure falling / GDP fell / there may be a
time delay before higher government spending
reduces unemployment (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not a central bank should aim 6 May approach the answer from the point of view of the
for a low inflation rate. disadvantages of high inflation.
2nd side should examine either the possible negative effects of
Award up to 4 marks for logical reasons why it should, what the central bank may do to reduce the inflation rate or the
which may include: possible loss of any beneficial effects of high inflation.
• can increase international price competitiveness
(1) improve the current account balance / No marks for possible effects on the exchange rate.
increase exports (1) increase employment /
reduce unemployment (1) Apply this example to all questions with the
• can create certainty (1) which may increase command word DISCUSS
confidence (1) which may encourage investment / (1g, 1h, 2d, 3d, 4d and 5d)
attract MNCs (1) which may increase output /
result in economic growth (1) Each point may be credited only once, on either side of an
• can prevent a random redistribution of income (1) argument, but separate development as to how / why the outcome
e.g. protect savers (1) may differ is rewarded.
• may protect purchasing power (1) by promoting
price stability (1) Generic example Mark
• maintain / increase living standards (1) if wages
rise by more than the price level (1) Tax revenue may decrease… 1
• can avoid fiscal drag (1) prevent people being put
in higher tax brackets (1) ...because of reason e.g. incomes may be lower. 1
• can reduce menu / shoe leather costs (1) reduce
firms’ costs of production (1). Tax revenue may increase because incomes may be 0
higher i.e. reverse of a previous argument.
Award up to 4 marks for logical reasons why it should
not, which may include: Tax revenue may increase because of a different 1
• increases in the rate of interest (1) contractionary reason i.e. not the reverse of a previous argument
monetary policy (1) can reduce consumer e.g. government spending on subsidies may
expenditure / can reduce investment (1) can stimulate the economy more than spending on
reduce total demand (1) education.

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Question Answer Marks Guidance

1(g) • lower total demand can increase unemployment

(1) cyclical unemployment (1) reduce economic
growth (1)
• low inflation can turn into deflation (1) leading to a
recession (1)
• makes it harder to pay off debt (1) increasing the
risk of firms going out of business / households
getting into difficulties (1)
• central bank may aim for economic growth / low
unemployment (1) higher demand-pull inflation
may provide more encouragement to firms to
expand (1).

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Question Answer Marks Guidance

1(h) Discuss whether or not economic growth benefits 6

everyone in the US.

Award up to 4 marks for logical reasons why it might,

which may include:

• economic growth increases output / GDP (1)

increases income per head / higher incomes /
higher wages (1) enables more purchasing power
/ people to enjoy more goods and services (1)
• economic growth can increase employment (1)
raise living standards (1) may reduce poverty (1)
• economic growth can increase tax revenue (1)
enabling the government to spend more on e.g.
education and healthcare (1)
• economic growth may introduce better working
conditions (1).

Award up to 4 marks for logical reasons why it might

not, which may include:
• there may be an increase in unemployment due
to lack of skills / some industries declining /
greater use of capital / capital-intensive
production (1) structural unemployment may
occur (1)
• income is unevenly distributed (1) those on low
incomes e.g. the sick may not benefit (1)
• higher output may result in external costs (1) e.g.
pollution (1) people living near factories may
suffer (1)
• higher output may be the result of more resources
being devoted to capital goods (1) may take time
for consumers to benefit from more consumer
goods (1)

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Question Answer Marks Guidance

1(h) • higher output may reduce natural resources (1)

reducing future generations’ ability to benefit from
them / reduce sustainability (1)
• higher output may be the result of workers
working longer hours (1) in poor working
conditions (1)
• may cause inflation (1) adversely affecting the
poor / savers (1).

Question Answer Marks Guidance

2(a) Identify two reasons why people become 2 If more than two reasons given, consider the first three.
entrepreneurs.

To make money / earn a profit (1) to be independent /

not having to be told what to do (1) to follow an
interest / be innovative / to run / own business (1)
willingness to take risks (1) possess good leadership
skills (1) easier to set up a firm / lower barriers to entry
(1) for self-esteem / status / become well-known (1)
flexible working hours (1) unable to find a job (1).

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Question Answer Marks Guidance

2(b) Explain two benefits an MNC can bring its host 4 One mark each for each of two benefits identified and one mark
country. each for each of two explanations.

Logical explanation which might include: If more than two benefits given, consider the first three.
Increase employment (1) raise living standards /
increase income / higher wages / reduce poverty (1).
Increase skills (1) provide training to workers (1).
Increase exports / reduce imports (1) improve the
current account of the balance of payments (1).
Increase GDP / output (1) raise economic growth (1).
Increase competition (1) raise efficiency / reduce
prices (1).
Bring in new technology (1) raise quality / raise
productive capacity / productivity / reduce costs of
production (1).
Increase the range of goods and services available in
the country (1) raise living standards (1).
Increase tax revenue (1) enable the government to
spend more (1).
Increase infrastructure (1) an MNC may build e.g.
roads / reduce e.g. transport costs (1).

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Question Answer Marks Guidance

2(c) Analyse how a government could encourage the 6 Note: reference to measures to reduce consumption of demerit
consumption of merit goods. goods can only be rewarded if clearly linked to switching to
alternative merit goods.
Coherent analysis which might include:

Provide a subsidy (1) reduce any indirect tax (1) lower

price (1) make the goods more affordable (1) raise
quality (1).
Provide information about the benefits of consuming
the goods (1) e.g. health campaigns / advertisements
(1) overcome information failure (1).
Use regulation (1) make consumption compulsory /
impose fines for non-consumption (1) e.g. school
attendance (1).
Provide services such as education / healthcare (1)
free to consumers (1).
Set maximum price (1) to make the goods more
affordable (1) but may create a shortage (1).
Measures to reduce demerit goods clearly linked to
idea of encouraging substitution of merit goods (1)
relevant example (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not private sector firms are 8

Level Description Marks
likely to charge lower prices than public sector
firms. 3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite. argument, making use of economic
information and clear and logical analysis
Why they might: to evaluate economic issues and
• competition may encourage private sector firms to situations. One side of the argument may
charge low prices have more depth than the other, but
• private sector firms may seek to reduce waste overall, both sides of the argument are
and costs to avoid going out of business considered and developed. There is
• private sector firms may have more funds to thoughtful evaluation of economic
invest concepts, terminology, information and /
• higher investment may reduce costs of production or data appropriate to the question. The
• may be an MNC with significant economies of discussion may also point out the
scale possible uncertainties of alternative
decisions and outcomes.
Why they might not:
2 A reasoned discussion which makes use 3–5
• profit motive may encourage private sector firms
of economic information and clear
to charge high prices
analysis to evaluate economic issues
• private sector firms may be monopolies
and situations. The answer may lack
• public sector firms may be subsidised some depth and development may be
• public sector firms may charge low prices to make one-sided. There is relevant use of
the products affordable economic concepts, terminology,
• public sector firms may produce on a large scale information and data appropriate to the
question.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for no 0
creditable content.

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Question Answer Marks Guidance

3(a) Define a minimum price. 2

A price set by e.g. government (1) above the

equilibrium price (1).
A price floor (1) to encourage higher supply (1) will
result in a surplus (1).

3(b) Explain two advantages of capital-intensive 4 One mark each for each of two advantages identified and one
production. mark each for each of two explanations.

Logical explanation which might include: If more than two advantages are given, consider the first three.
Lower costs of production (1) can produce on a large
scale / may result in lower prices / higher profits (1).
Raise productivity / efficiency (1) higher output / can Accepting lower costs of production as overall lower costs.
produce faster (1). Nothing for lower labour costs.
Quality may increase / consistency of quality may be
greater (1) may increase demand (1).
Absence of human error (1) less wastage (1).
Capital goods can work long hours (1) need few
breaks / no need for holidays (1).
Capital goods will not take industrial action (1) will not
disrupt production (1).
Can eliminate boring / repetitive / physically
demanding tasks (1) increase workers’ job satisfaction
(1).

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Question Answer Marks Guidance

3(c) Analyse why low-income farmers are likely to have 6

low living standards.

Coherent analysis which might include:

May be unable to afford basic necessities / may spend

a high proportion of income on basic necessities / low
purchasing power / low ability to consume goods and
services (1).
Unable to save much (1) banks reluctant to lend to
them (1) examples of items they may need to borrow
to buy which could improve their quality of life (1).
Unable to afford good quality housing (1) which can
result in poor health / overcrowding (1).
Unable to afford good health care (1) good nutrition /
food (1) more likely to become ill (1) lower life
expectancy (1).
Unable to afford good education (1) reduce range of
interests (1).
Unable to buy good capital equipment for farms (1)
making work hard (1).
May have to reinvest into their farms giving them less
to spend (1).
May experience poor working conditions / physically
demanding work (1) long hours (1) reducing health (1)
Live in rural areas (1) which may lack infrastructure
(1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a government subsidy on 8

Level Description Marks
the export of sugar will help it achieve its
macroeconomic aims. 3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite. argument, making use of economic
information and clear and logical analysis
Why it might: to evaluate economic issues and
• lower price of exports and increase their supply situations. One side of the argument may
• increase export revenue and improve the current have more depth than the other, but
account balance overall, both sides of the argument are
• higher output of sugar can contribute to economic considered and developed. There is
growth thoughtful evaluation of economic
• more people may be employed in growing sugar concepts, terminology, information and /
and processing sugar cane or data appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of alternative
• other countries’ sugar may still be cheaper decisions and outcomes.
• may make farmers and mill owners lazy
2 A reasoned discussion which makes use 3–5
• sugar sellers may not lower their prices
of economic information and clear
• demand for sugar may be price-inelastic analysis to evaluate economic issues
• introduction of capital equipment may lower and situations. The answer may lack
employment some depth and development may be
• other countries may retaliate against the subsidy one-sided. There is relevant use of
and so current account position may not be economic concepts, terminology,
improved information and data appropriate to the
• higher exports may increase total demand question.
resulting in inflation
• opportunity cost – e.g. spending on education 1 There is a simple attempt at using 1–2
which may be more effective. economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for no 0
creditable content.

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Question Answer Marks Guidance

4(a) Identify two causes of an increase in labour 2 Nothing for more motivated – TV.
productivity.

Two from:
• improved education
• improved training / higher skills
• improved healthcare
• higher pay / bonuses / lower income tax
• better quality capital equipment / advances in
technology
• shorter working hours / longer holidays
• better working conditions / better (fringe) benefits
• increased experience
• higher unemployment
• specialisation

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Question Answer Marks Guidance

4(b) Explain two reasons why someone may choose to 4 One mark each for each of two reasons identified and one mark
become a doctor. each for each of two explanations.

Logical explanation which might include: If more than two reasons given, consider the first three.
High pay (1) resulting in high living standards / caused
by low supply / high demand / high number of job
vacancies / strong bargaining power / high
qualifications / high skills (1).
Vocation (1) wanting to help people (1).
Interest / job satisfaction (1) enjoying the challenges
involved (1).
Status (1) doctors are highly regarded (1).
Family tradition (1) parents may have been doctors
(1).
High pensions (1) enabling high living standards
during retirement (1).
May be good working conditions (1) working inside
(1).
Job security (1) difficult to replace / essential service
(1).
(Fringe / non-wage) benefits (1) e.g. pension schemes
(1).

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Question Answer Marks Guidance

4(c) Analyse how advances in technology may 6 Reward but do not expect reference to gaining a comparative
improve the current account balance on a advantage.
country’s balance of payments.

Coherent analysis which might include:

Raise productivity / increase efficiency / increase

speed of production / increase output (1) reduce costs
of production (1) lower prices (1) raise quality (1)
create new products (1) increase international
competitiveness (1) increase exports (1) reduce
imports (1) increase export revenue (1) reduce import
expenditure (1) improve trade in goods (and services)
balance / reduce a current account deficit / create a
surplus / increase a surplus (1).
Increase access to information about goods and
services (1) promote sales (1).
Increase foreign tourism (1) easier to book foreign
holidays (1) increase speed of transport (1).
Make it easier to keep in contact with branches
abroad (1) encourage setting up branches in other
countries (1) receive profits from other countries (1)
increase primary income (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not a country with a high 8

Level Description Marks
population growth rate is likely to experience a
high economic growth rate. 3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite. argument, making use of economic
information and clear and logical analysis
Why it might: to evaluate economic issues and
• may have an increasing labour force, capable of situations. One side of the argument may
producing a higher output have more depth than the other, but
• likely to have higher demand, encouraging higher overall, both sides of the argument are
output considered and developed. There is
• larger markets can enable greater advantage to thoughtful evaluation of economic
be taken of economies of scale concepts, terminology, information and /
• may have higher tax revenue, enabling the or data appropriate to the question. The
government to spend more on e.g. education discussion may also point out the
which can promote economic growth possible uncertainties of alternative
decisions and outcomes.
Why it might not:
• may have an increase in the number of 2 A reasoned discussion which makes use 3–5
dependents, reducing resources which can be of economic information and clear
devoted to increasing productive capacity analysis to evaluate economic issues
and situations. The answer may lack
• rise in birth rate may reduce the size of the labour
some depth and development may be
force as people leave the labour force to bring up
one-sided. There is relevant use of
children
economic concepts, terminology,
• resources may be depleted, reducing productive
information and data appropriate to the
capacity
question.
• external costs e.g. congestion and pollution may
increase which may reduce productivity. 1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for no 0
creditable content.

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Question Answer Marks Guidance

5(a) Identify two determinants of price elasticity of 2 If more than two determinants given, consider the first three.
demand.

Two from:
• substitutes
• whether a luxury or necessity
• proportion of income taken
• whether habit forming / addictive
• whether the purchase can be postponed
• time period
• breadth of definition
• brand loyalty
• number of uses
• complements

5(b) Explain how the economic problem results in 4

consumers having to make choices.

Logical explanation which might include:

The economic problem is unlimited / infinite wants (1)

exceeding limited / finite / scare resources (1)
resulting in scarcity (1).
Consumers have limited incomes (1) and so cannot
buy everything they want (1).
Buying one product involves an opportunity cost (1) in
the form of another product sacrificed / example (1).

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Question Answer Marks Guidance

5(c) Analyse why some workers decide not to join a 6

trade union.

Coherent analysis which might include:

Trade unions charge a subscription fee (1) workers

cannot afford to join (1) may be unemployed / have
low income (1).
Government legislation may prevent trade union
membership / government may discourage
membership (1) may reduce the power of trade unions
(1) less benefit from joining (1).
Employers may discourage membership (1) may think
it will reduce chance of employment / increase chance
of unemployment (1) chance of promotion (1).
May be satisfied with wages (1) working conditions (1)
may have job security (1) no need for collective
bargaining (1).
May be employed in industries that do not have a
history of trade union membership (1).
May be reluctant to take industrial action (1) may lose
pay during a strike (1).
May not agree with the objectives of the trade union
(1).
May follow example of fellow workers (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not a government should 8

Level Description Marks
reduce the amount of money it gives to each state
pensioner. 3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite. argument, making use of economic
information and clear and logical analysis
Why it should: to evaluate economic issues and
• ageing population can mean the amount of situations. One side of the argument may
government spending on pensions rises have more depth than the other, but
significantly overall, both sided of the argument are
• a reduction in the state pension could reduce a considered and developed. There is
budget deficit thoughtful evaluation of economic
• may persuade people to work longer, raising concepts, terminology, information and /
output and tax revenue or data appropriate to the question. The
• paying pensions involves an opportunity cost, discussion may also point out the
could spend more on e.g. education possible uncertainties of alternative
decisions and outcomes.
Why it should not:
• will reduce living standards of pensioners 2 A reasoned discussion which makes use 3–5
of economic information and clear
• may increase the numbers living in absolute
analysis to evaluate economic issues
poverty
and situations. The answer may lack
• will reduce total demand
some depth and development may be
• lower spending by pensioners could reduce one-sided. There is relevant use of
output and increase unemployment. economic concepts, terminology,
information and data appropriate to the
question.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for no 0
creditable content.

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 Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions February/March 2024

2 hours 15 minutes

You must answer on the enclosed answer booklet.

* 8 2 6 9 3 3 8 8 6 7 *

You will need: Answer booklet (enclosed)

INSTRUCTIONS
● Answer four questions in total:
Section A: answer Question 1.
Section B: answer three questions.
● Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.
● You may use a calculator.

INFORMATION
● The total mark for this paper is 90.
● The number of marks for each question or part question is shown in brackets [ ].

This document has 8 pages. Any blank pages are indicated.

DC (JP) 327771/4
© UCLES 2024 [Turn over
 2

Section A

Read the source material carefully before answering Question 1.

Source material: Changes in the Danish economy

Denmark fact file

GDP 2021 $372 bn
Labour force in employment 2020 3m
Total wages paid 2020 $252 bn
HDI value 2019 0.94
HDI ranking 2019 10th

Denmark is a high-income, North European country. The Danish population have high living standards
and enjoy relatively long hours of leisure time. They spend this time in a variety of ways including
cycling, jogging and playing golf.

Danish workers are employed in a range of industries. Denmark used to be a leading shipbuilding
country but now the industry is in decline. Ships have substitutes in other forms of transport. Also, it
may be possible to postpone the purchase of ships, they take a long time to produce and they are
expensive to store. In contrast to the shipbuilding industry, the Danish toy industry has grown in recent
years.

Denmark’s shipbuilding and toy industries are in the private sector. Denmark’s economic performance
is also influenced by changes in the public sector. Table 1.1 shows Danish government spending and
GDP over the period 2015 to 2021.

Table 1.1 Danish government spending and GDP 2015 – 2021

Year Government spending ($bn) GDP ($bn)

2015 77 303
2016 78 314
2017 79 333
2018 80 356
2019 82 350
2020 84 356
2021 86 372

Denmark is heavily involved in international trade. It usually has a surplus on the current account of
its balance of payments. International trade affects the availability of products in the country and the
country’s foreign exchange rate. It also affects the country’s GDP and level of employment.

How people work in Denmark, as in most countries, has changed in recent years. More people now
spend at least some of their working hours working from home. This change is expected to affect
productivity and help firms keep their workers. Households may be encouraged to move out of cities
and to buy larger homes. There may also be changes in demand for transport, demand for food sold in
city centres and firms’ need for office space.

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Answer all parts of Question 1. Refer to the source material in your answers.

1 (a) Calculate the average wage paid in Denmark in 2020. [1]

(b) Identify two possible opportunity costs of a Danish person using their leisure time to cycle.
[2]

(c) Explain one way that living standards are measured in Denmark. [2]

(d) Explain two reasons why the supply of ships is price-inelastic. [4]

(e) Analyse the relationship between government spending and GDP in Denmark. [4]

(f) Analyse, using a demand and supply diagram, how an increase in the birth rate would affect
the market for toys. [5]

(g) Discuss whether or not a surplus on the current account of its balance of payments would
benefit the Danish economy. [6]

(h) Discuss whether or not more people working from home will benefit an economy. [6]

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 4

Section B

Answer any three questions.

Each question is introduced by stimulus material. In your answers you may refer to the material and/or
other examples you have studied.

2 Since 2016, South Korea’s population has declined, due to a falling birth rate, and a high proportion
of its population is now aged over 64. The South Korean government has used tax revenue to give
cash incentives to couples to have more children. However, many parents have chosen to have
fewer children and spend more on each child to ensure they get a good education. South Korea
now has fewer but larger schools.

(a) Identify two benefits people may gain from a good education. [2]

(b) Explain two reasons for a change in the amount of tax revenue a government receives. [4]

(c) Analyse the economies of scale a school may gain from an increase in its size. [6]

(d) Discuss whether or not having a high proportion of a country’s population over the age of 64
is a benefit to its economy. [8]

3 Some firms in Monaco have experienced external growth. Firms in Monaco pay high wages.
Workers in Monaco benefit from fiscal policy which contributes to high employment. Their
government does impose VAT on food, including fruit. Some economists have suggested that
instead of taxing fruit, governments should provide free fruit to consumers.

(a) Define external growth of firms. [2]

(b) Explain two reasons why low-skilled workers may be highly paid. [4]

(c) Analyse how fiscal policy can increase employment. [6]

(d) Discuss whether or not a government should provide free fruit to consumers. [8]

4 In 2021, the Suez Canal was blocked by one of the world’s biggest container ships. This affected
some firms’ profits and caused a shortage in a number of products. The delivery of luxury chocolate
and salt, for example, was delayed. These two goods have differences in their price elasticity
of demand. The disruption to international trade created particular difficulties for those countries
which import most of the food they consume.

(a) Define a shortage. [2]

(b) Explain two ways a firm can increase its profit. [4]

(c) Analyse the reasons why the price elasticity of demand for one brand of luxury chocolates is
likely to be different from that of salt. [6]

(d) Discuss whether or not a country should import most of the food it consumes. [8]

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5 New Zealand is a high-income country with a low unemployment rate and a surplus of imports
over exports. Recently, its government has made some important economic decisions. In 2022,
it banned everyone born after 2008 from buying cigarettes. A year before, it gave permission for
firms to explore for oil in the country.

(a) Define unemployment rate. [2]

(b) Explain two reasons why a government may discourage cigarette smoking. [4]

(c) Analyse why a country’s exports may decrease. [6]

(d) Discuss whether or not the discovery of oil in a country will benefit its economy. [8]

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Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
at www.cambridgeinternational.org after the live examination series.

Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

© UCLES 2024 0455/22/F/M/24

Cambridge IGCSE™

ECONOMICS 0455/21
Paper 2 Structured Questions May/June 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 22 printed pages.

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0455/21 Cambridge IGCSE – Mark Scheme May/June 2023
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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.

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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.

Social Science-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
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)

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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).

3 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical line of

MAX
thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate Australia’s unemployment rate in 2021. 1 0.56 / 14  100

4% Allow 4 without percentage

1(b) Identify two substitutes for coal. 2

Two from:
 gas
 offshore wind / wind power
 solar power / panels

1(c) Explain one economy of scale that could benefit a coal- 2 One mark for the economy of scale identified and one mark
mining firm. for an explanation.

Managerial / labour economy (1) employing specialist

workers e.g. mining engineers (1).
Technical economy (1) employing efficient / technologically
advanced equipment e.g. drones (1).
External economy of scale (1) example e.g. skilled labour
force (1).

1(d) Explain two influences on the price elasticity of supply 4 One mark each for each of two influences identified and one
of coal. mark each for each of two explanations.

Storage time (1) expensive to store so inelastic supply (1).

Construction of new mine / production time (1) takes a long
time, so inelastic supply (1).
Stocks (1) may make supply elastic (1).

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Question Answer Marks Guidance

1(e) Draw a demand and supply diagram to show how 4

setting a maximum price below the equilibrium price will
affect a market.

Demand and supply diagram:

Axes correctly labelled – price and quantity or p and q (1).
Demand and supply curves correctly labelled (1).
Price line set below the equilibrium (1).
Demand shown as greater than supply (1) e.g. has the two
dotted lines downwards (it does not have to be labelled Qs
and Qd).

Note:

Accept unlabelled price line / line drawn only to demand

curve.

Accept shortage if correctly identified on the diagram.

Do not accept demand greater than supply if demand and

supply curves are incorrectly drawn

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Question Answer Marks Guidance

1(f) Analyse whether large coal-producing countries are 5 Responses do not have to be in the format suggested but
likely to be net exporters of coal. they should address the expected / normal outcome, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.

Expected outcome:
Large coal producing countries may have a surplus to sell /
may have grown their production in order to sell abroad (1)
most of the evidence supports this relationship (1)

Supporting evidence:
Five of the seven countries consume less coal than they
produce (1) calculation e.g. US could have exported 11
million tonnes / Australia could have exported 394 million
tonnes or simply the difference (1).

Analysis:
Countries that produce more coal than they consume may
benefit from economies of scale / can export because their
prices are low (1).

Exceptions:
China or India are an exception (1) as they consumed more
coal than they produced (1).

Analysis:
they may have been net importers (1) since had used up
stocks of coal / need more energy as a developing country
(1) may not be able to export coal if world demand for coal is
low / countries may both import and export coal (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not an increase in the size of its 6 Apply this example to all questions with the command
coal industry will benefit the Australian economy. word DISCUSS (1g, 1h, 2d, 3d, 4d and 5d)

Award up to 4 marks for logical reasons why it might, which Each point may be credited only once, on either side of an
may include: argument, but separate development as to how/why the
 may increase GDP / economic growth (1) increasing outcome may differ is rewarded.
living standards / raise incomes / reduce poverty (1)
 may reduce unemployment (1) structural unemployment Generic example Mark
(1)
 may improve current account position / have a surplus Tax revenue may decrease … 1
(1) as Australia seems to be a net exporter of coal (1)
 may increase tax revenue (1) increasing government’s … because of reason e.g. incomes may be lower. 1
ability to spend (1)
 economies of scale (1) result in lower prices for Tax revenue may increase because incomes may 0
households and industries (1). be higher i.e. reverse of a previous argument.

Award up to 4 marks for logical reasons why it might not, Tax revenue may increase because of a different 1
which may include: reason i.e. not the reverse of a previous argument
 may increase pollution (1) lowering living standards / e.g. government spending on subsidies may
cause health issues (1) reduce tourism / negative stimulate the economy more than spending on
impact on current account (1) education.
 other forms of power may not be developed (1) example
(1)
 some workers may leave other jobs (1) these jobs may
have better working conditions (1)
 coal mining is a relatively dangerous industry (1) so life
expectancy may be reduced / creates chronic illnesses /
workers unable to work (1).
 Global demand for coal may fall (1) impact upon
Australia e.g. unsold stock (1).
 May rapidly deplete stocks (1) leading to lower exports
(1) and less employment (1).

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Question Answer Marks Guidance

1(h) Discuss whether or not Australia is likely to have a 6

budget deficit in 2026.

Award up to 4 marks for logical reasons why it might, which

may include:
 unemployment is forecast to increase (1) so there may
be more government spending on unemployment
benefits (1) less income tax revenue (1)
 there may be more government spending on retraining
unemployed workers (1)
 some of the rise in population may result in more
government spending (1) e.g. on pensions / healthcare /
education (up to 2 marks)
 budget deficit in previous years (1) would mean interest
would have to be paid on the debt that has built up (1).

Award up to 4 marks for logical reasons why it might not,

which may include:
 population and the labour force are forecast to increase
(1) so there may be more taxpayers / fewer claiming
benefits (1)
 tax revenue may rise (1) due to higher profits / higher
tax rates (1)
 GDP is forecast to increase (1) more people in work (1)
which would be likely to increase direct and indirect tax
revenue (1)
 state support for industries may fall (1) may have been
high in 2021 due to Covid-19 (1).

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Question Answer Marks Guidance

2(a) Identify two functions of money. 2 Note: a description of the function, without the term, gets a
mark e.g. money can be used to buy and sell products, may
Two from: be used to trade.
 Medium of exchange
 Unit of account / measure of value Nothing for characteristics of money.
 Store of value
 Standard of deferred payments If more than two functions are given, consider the first three.

2(b) Explain how improved education may affect the demand 4 Only accept demand for cigarettes may increase if linked to
for cigarettes and for fresh fruit. higher income (resulting from improved education).

Logical explanation which might include: One mark for each of two reasons identified and one for
It may reduce demand for cigarettes (1) people may be each of two explanations.
better informed about harmful effects / cigarettes are a
demerit good (1).
It may increase demand for fresh fruit (1) people may be
better informed about beneficial effects / fresh fruit is a merit
good / may gain better paid jobs and so able to afford fresh
food (1).

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Question Answer Marks Guidance

2(c) Analyse the causes of an increase in a government’s tax 6

revenue.

Coherent analysis which might include:

Tax revenue is government income / part of government
fiscal policy (1) which can be spent on government
objectives e.g. education (1)
Increase in employment (1) increase in income (1)
More convenient (1) easier to pay (1) and collect the tax (1)
higher income tax revenue (1)
Increase in spending (1) higher indirect tax revenue (1)
Increase in profits (1) higher corporation tax (1)
Increase in population (1) more people to pay taxes (1)
Change in tax rates (1) higher tax rates can increase
revenue without a change in income / spending / profits (1)
lower tax rates may reduce tax avoidance / evasion (1)
increase incentives (1)
Greater efficiency in tax collection (1) reduction in corruption
/ simpler forms (1)
Wider tax base (1) more products / more people taxed (1)
Increase in imports (1) higher revenue from tariffs (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not an increase in unemployment 8

Level Description Marks
benefit payments would reduce poverty.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 raise incomes of those on low incomes to evaluate economic issues and
 may enable them to buy more basic necessities situations. One side of the argument may
 may reduce absolute poverty have more depth than the other, but
 may increase total demand overall, both sides of the argument are
 higher total demand may reduce unemployment considered and developed. There is
thoughtful evaluation of economic
 Also enable them to seek education / become more
concepts, terminology, information and / or
employable
data appropriate to the question. The
discussion may also point out the possible
Why it might not: uncertainties of alternative decisions and
 may be a disincentive to find employment outcomes.
 people may become dependent on benefits
 will not help all those on low incomes e.g. the retired 2 A reasoned discussion which makes use of 3–5
and the sick economic information and clear analysis to
 may not reduce relative poverty evaluate economic issues and situations.
 some of the unemployed may not claim benefits The answer may lack some depth and
 opportunity cost – government could spend on e.g. development may be one-sided. There is
education which might be more effective. relevant use of economic concepts,
terminology, information and data
 Size of unemployment benefit may be small and may be
appropriate to the question.
less than inflation
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

3(a) Identify two reasons why death rates may vary between 2 Do not accept differences in population size as these affect
countries. number rather than rate.

Two from differences in: If more than two reasons are given, consider the first three.
 income / standard of living
 healthcare
 education
 nutrition
 lifestyles / suicide rates
 average age
 spread of Covid / infectious diseases
 war / conflict
 natural disasters
 air pollution / water pollution
 conditions of work
 level of crime

3(b) Explain two causes of an increase in the size of a 4 One mark each for each of two causes identified and one
country’s labour force. mark each for each of two explanations.

Logical explanation which might include:

Change in the birth rate (1) rise will mean more people of
working age in the long run / fall will enable more parents to
be in the labour force (1).
Immigration (1) many immigrants are of working age (1).
Rise in retirement age (1) people will work for longer (1).
Fall in school leaving age (1) people will be in education for
a shorter period (1).
Fall in the death rate / rise in life expectancy (1) fewer
people dying before reaching retirement age (1).
Changes in social culture (1) allowing more women to work
(1).
Increase in size of population of working age (1) reason (1).
Rise in wage levels (1) attracts people to re-enter the labour
market (1).

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Question Answer Marks Guidance

3(c) Analyse how an increase in labour productivity in a 6

country can increase a surplus on the current account
of its balance of payments.

Coherent analysis which might include:

Output per worker (hour) increases (1) may reduce average
cost of production (1) lower prices (1) may increase the
quality of exports (1).
These changes may increase international competitiveness
of exports / make exports cheaper (1) demand for exports
may increase (1) export revenue may rise (1).
Higher relative prices of imports (1) lower relative quality of
imports (1) these changes may decrease international
competitiveness of imports (1) demand for imports may
decrease (1) import expenditure may fall (1).
Output increases (1) allowing more exports (1) and less
imports (1).

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Question Answer Marks Guidance

3(d) Discuss why some countries may experience lower 8

Level Description Marks
inflation in the future and some may not.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why some might: information and clear and logical analysis
 advances in technology may reduce costs of production to evaluate economic issues and
 increases in education and healthcare could raise situations. One side of the argument may
labour productivity have more depth than the other, but
 globalisation may increase international competition overall, both sides of the argument are
 trade union power may fall, lowering wage increases considered and developed. There is
 successful government policy measures e.g. reducing thoughtful evaluation of economic
demand concepts, terminology, information and / or
data appropriate to the question. The
discussion may also point out the possible
Why some might not:
uncertainties of alternative decisions and
 consumers may become optimistic and spend more outcomes.
 governments may increase their spending
 the rate of interest may fall 2 A reasoned discussion which makes use of 3–5
 total demand may increase economic information and clear analysis to
 raw materials may run out evaluate economic issues and situations.
 rising cost of energy and rising food prices. The answer may lack some depth and
development may be one-sided. There is
relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

4(a) Identify two influences on which country a person 2 If more than two influences are given, consider the first
decides to work in. three.

Two from:
 wages / GDP per head
 working conditions
 job opportunities / job security
 qualifications required
 family ties
 language spoken
 immigration restrictions
 personal safety/ freedom from persecution
 living standards / cost of living
 better welfare / healthcare / education provision

4(b) Explain, with examples, the difference between a merit 4 One mark each for each of two differences identified and
good and a public good. one mark each for each of two examples

Logical explanation which might include:

A merit good e.g. education / fruit (1) is beneficial / is under-
consumed / people unaware of benefits / so underproduced
without government intervention / government encourage
consumption (1).

A public good e.g. defence / streetlighting / police / sea

defences / roads (1) would not be produced by the private
sector / needs to be financed by the government/ non-rival/
non-excludable (1).

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Question Answer Marks Guidance

4(c) Analyse how an increase in government spending could 6 MAX of three marks for just identifying areas of government
increase life expectancy. spending

Coherent analysis which might include increased MAX of three marks for analysis of any single area of
government spending on: spending.

Healthcare (1) could raise quality / accessibility of healthcare One item analysed well MAX 4 marks.
(1).
Education (1) may result in people leading healthier lives (1)
more exercise (1) better nutrition (1).
Benefits (1) may increase access to basic necessities /
reduce poverty (1).
Green energy (1) may reduce pollution (1).
Infrastructure (1) could reduce traffic accidents (1) reduce
traffic congestion (1) reduce stress (1).
Police (1) reduces deaths through crime (1).
Increased government spending (in total) (1) may increase
employment / raise income / raise standards of living (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not a rise in a country’s foreign 8

Level Description Marks
exchange rate would benefit its economy.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 reduce price of imports to evaluate economic issues and
 this could lower inflation as raw material costs may fall situations. One side of the argument may
and more competitive pressure for firms to keep price have more depth than the other, but
rises low overall, both sides of the argument are
 enables a country to buy more imports for any given considered and developed. There is
quantity of exports thoughtful evaluation of economic
 could reduce a current account surplus which may concepts, terminology, information and/or
enable more products to be consumed. data appropriate to the question. The
discussion may also point out the possible
uncertainties of alternative decisions and
Why it might not:
outcomes.
 increase the price of exports
 this could reduce exports and export revenue 2 A reasoned discussion which makes use of 3–5
 economic growth could fall economic information and clear analysis to
 unemployment could rise evaluate economic issues and situations.
 could increase a current account deficit. The answer may lack some depth and
development may be one-sided. There is
relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

5(a) Identify two reasons why rich households spend more 2 If more than two reasons are given, consider the first three.
than the average household.

Two from:
 higher incomes
 find it easier to borrow
 more confidence
 more savings / more wealth
 high cost of luxury goods and services
 maintaining / showing status
 rich households may choose to have large families

5(b) Explain the significance of a production point inside a 4 One mark each for each of two significances identified and
PPC and a production point on its PPC. one mark each for each of two explanations.

Logical explanation which might include:

A point inside a PPC means output is lower than potentially
achievable (1) there are unemployed resources / there is
inefficient use of resources (1).
A point on a PPC means output is at its maximum (1) all
resources are employed / full employment / there is efficient
use of resources (1).
A production point shows a combination of goods produced
(1) example e.g. X capital goods and Y consumer goods (1).

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Question Answer Marks Guidance

5(c) Analyse why someone who has been unemployed for 6

more than a year may not get another job.

Coherent analysis which might include:

May lose skills (1) qualifications may become out of date (1)
may experience ill-health (1) lack of recent job experience
(1) high cost of retraining (1) may become less attractive to
employers (1).
Skills may be outdated (1) industry in decline (1) will need
retraining (1).
Economy could be in recession (1) with high number of
people unemployed and few vacancies (1).
May lose confidence / become discouraged / depressed (1)
put less effort into finding another job (1).
Unemployed workers may be occupationally immobile (1)
geographically immobile (1).
Unemployment/welfare benefits may be high (1) may be
above low wages / maybe sufficient to live on (1).
May face discrimination (1) on grounds of e.g. age (1).
May retire (1) and leave the labour force (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not a government should encourage 8

Level Description Marks
firms to merge.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it should: information and clear and logical analysis
 may result in economies of scale to evaluate economic issues and
 lower average costs of production situations. One side of the argument may
 lower prices for consumers have more depth than the other, but
 raise quality of products overall, both sided of the argument are
 increase international competitiveness and improve considered and developed. There is
current account thoughtful evaluation of economic
 improved performance may increase profits and concepts, terminology, information and/or
data appropriate to the question. The
corporation tax
discussion may also point out the possible
uncertainties of alternative decisions and
Why it should not: outcomes.
 may result in diseconomies of scale
 may increase monopoly power / reduce competition 2 A reasoned discussion which makes use of 3–5
 raise prices economic information and clear analysis to
 may reduce innovation evaluate economic issues and situations.
 rationalisation may result in some workers losing their The answer may lack some depth and
jobs development may be one-sided. There is
 should be left to market forces to decide. relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions May/June 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 24 printed pages.

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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.

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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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Social Science-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
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 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical line of

MAX
thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate the number of people who were living in 1

poverty in Guyana in 2020.

276 500 (1).

1(b) Identify two causes of the decrease in the output of 2 If more than two causes given, consider the first three.
sugar in 2020.

Bad weather (1) falling (global) demand (1).

1(c) Explain how economic growth is measured. 2 If more than two ways given, consider the first three.

Real (1) GDP / national / country’s output / income / Not accepting GDP per head for GDP.
expenditure (1).

1(d) Explain two reasons why labour mobility may increase 4 One mark each for each of two reasons identified and one
in Guyana in the future. mark each for each of two explanations.

Logical explanation which might include: If more than two reasons given, consider the first three.
Increased government spending on education / improved
education (1) improved skills / productivity / occupational
mobility (1).
Improved / cheaper rail travel / increased spending on
infrastructure / improved infrastructure (1) easier to work
further away / increased ability to work in other areas /
increased geographical mobility (1).
Increased government spending on the internet (1) people
learn new skills / gain information about job opportunities /
increase occupational mobility (1).
May be net immigration (1) migrants may be skilled / may be
more willing to move to different areas of the country (1).

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Question Answer Marks Guidance

1(e) Draw a demand and supply diagram to show the effect 4

of a decrease in the price of rail transport on the market
for car transport.

Demand and supply diagram:

Axes correctly labelled – price and quantity or p and q (1).
Original demand and supply curves correctly labelled (1).
Demand curve shifted to the left (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

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Question Answer Marks Guidance

1(f) Analyse the relationship between GDP per head and 5 Responses do not have to be in the format suggested but
internet access. they should address the expected / normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.

Expected relationship: In terms of supporting evidence: no marks for just

Direct / positive (1) the higher the GDP per head, the higher description of the figures e.g. Brazil had a GDP per head of
the internet access (1) $8717and 72% of the population with internet access /
Eritrea had a GDP per head of $643 and 2% of population
Supporting evidence: with internet access. France had a GDP of $40 494 and 83%
Up to two marks of the population with internet access etc.
E.g. Iceland with the highest GDP per head had the highest
% of the population with internet access In terms of supporting evidence one mark maximum for an
Eritrea with the lowest GDP per head had the least internet indirect comparison e.g. Iceland had a GDP per head of
access $66 945 and 99% population with internet access whereas in
France with the second highest GDP per head has the Zambia with a GDP per head of $1,305, only 29% of the
second highest % of population with internet access population had access to the internet.

Analysis of expected relationship:

Higher GDP per head increases household’s ability to pay
for internet access / higher internet access may increase
productivity/efficiency / increase job opportunities (1) higher
GDP per head increases tax revenue, some of which can be
spent on the provision of internet access / higher
productivity/efficiency could increase wages (1).

Exception:
Guyana / Morocco (1) Guyana had a higher GDP per head
but low internet access (1).

Analysis of exception:
Internet access is determined by other influences e.g.
education levels (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not the discovery of oil is likely to 6 3rd bullet point: increase in government spending should be
increase living standards in Guyana. linked to a form of spending that could increase living
standards.
Award up to 4 marks for logical reasons why it might, which
may include: Apply this example to all questions with the command
 increase exports (1) increase economic growth / higher word DISCUSS
national output (1) and raise incomes / increase GDP (1g, 1h, 2d, 3d, 4d and 5d)
per head (1) increase purchasing power / able to buy
more goods and services / able to buy basic necessities Each point may be credited only once, on either side of an
(1) could reduce poverty (1) argument, but separate development as to how/why the
 create jobs / reduce unemployment / increase outcome may differ is rewarded.
employment (1) discourage emigration / encourage
immigration (1). Generic example Mark
 raise tax revenue (1) allowing the government to spend
more on e.g. education and healthcare (1) MNCs may Tax revenue may decrease … 1
spend on e.g. improving infrastructure / training (1).
... because of reason e.g. incomes may be lower. 1
Award up to 4 marks for logical reasons why it might not,
which may include: Tax revenue may increase because incomes may 0
 may create pollution (1) create external costs / damage be higher i.e. reverse of a previous argument.
the environment (1) which will harm people’s health /
reduce life expectancy (1) Tax revenue may increase because of a different 1
 may be poor working conditions in the industry (1) reason i.e. not the reverse of a previous argument
affecting health of workers (1) e.g. government spending on subsidies may
 the foreign MNC may send much of the profit back to its stimulate the economy more than spending on
country (1) it may drive domestic oil firms out of education.
business (1) may deplete the country’s oil reserves (1)
 the foreign MNC may employ workers from its own
country (1)
 global demand for oil may fall /may be overdependence
on oil / other countries may impose trade restrictions on
oil. (1)

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Question Answer Marks Guidance

1(h) Discuss whether or not Guyana would benefit from an 6

increase in the size of its population.

Award up to 4 marks for logical reasons why it might, which

may include:
 population is below the optimum level / move to the
optimum level (1), could make better use of resources
(1)
 if rise due to immigration (1) may bring in new ideas /
new production methods / new skills / new technology
(1)
 an increase in the size of the labour force (1) if the
number of people of working age increases (1) rise in
tax revenue (1) allowing the government to spend more
on e.g. education and healthcare (1)
 consumer expenditure may increase (1) total
(aggregate) demand may increase (1)
 output could increase / cause economic growth /
increase productive potential (1)
 dependency ratio could fall (1)

Award up to 4 marks for logical reasons why it might not,

which may include:
 larger population could result in pollution / congestion /
overcrowding (1) damage the environment / increase
external costs (1)
 if rise due to fall in death rate or rise in the birth rate /
increase in young / old population (1), the dependency
ratio will increase (1) some of the extra population may
be unemployed (1)

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Question Answer Marks Guidance

1(h)  pressure may be put on e.g. housing / welfare payments 6

(1) increasing need for government expenditure (1)
 there may be inflation (1)
 population may increase to the extent that there is
overpopulation (1) resources may be depleted (more
quickly) (1).

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Question Answer Marks Guidance

2(a) Identify two influences, other than price, on a 2 If more than two influences given, consider the first three.
customer’s choice of bank.
Not accepting brand loyalty.
Two from:
 services provided Accept whether the bank offers Islamic banking.
 amount willing to lend
 size of bank Also accept interest on its own.
 online facilities
 location
 interest paid or charged
 where family banks
 advertising
 green investments
 community involvement
 reputation
 confidence in the bank / reliability / safety
 relationship with staff
 whether foreign currency can be exchanged

2(b) Explain two reasons why a merger may result in higher 4 One mark each for each of two reasons identified and one
prices for consumers. mark each for each of two explanations.

Logical explanation which might include: If more than two reasons given, consider the first three.
More market power / less competition / monopoly power /
may become a monopoly (1) can raise price as consumers Can accept higher cost if linked to diseconomies of scale or
will not be able to switch to other firms / demand may carrying out the merger.
become more inelastic / can control price / become a price Not accepting the idea of higher costs because the firm will
maker (1). be larger (idea of higher total costs).
May experience diseconomies of scale / example of a
diseconomy of scale that may be experienced (1) raise
prices due to higher (average) costs (1).
Carrying out the merger may be expensive (1) price raised
to cover the cost of e.g. retraining staff / making some staff
redundant (1).

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Question Answer Marks Guidance

2(c) Analyse how an increase in bank lending can benefit an 6

economy.

Coherent analysis which might include:

It could increase consumer expenditure (1) increase total
demand (1) raise employment /reduce unemployment (1)
reduce deflation (1).
It could increase investment / increase spending on capital
goods (1) benefit from advances in technology / innovation /
better quality capital goods (1) increase productivity (1) raise
the quality of products (1) lower price (1) increase exports
(1) lower imports (1) improve the current account balance
(1) cause economic growth / increase GDP / increase output
/ encourage firms to expand / new firms to set up (1).
May enable the people to improve skills / to set up small
business / buy basic necessities / reduce poverty (1).
Lend to firms in financial difficulties (1) stop them going out
of business (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not a market economy allocates 8

Level Description Marks
resources in the best possible way.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 price moves to reflect changes in demand and supply to evaluate economic issues and
 resources move from products falling in demand situations. One side of the argument may
towards those rising in demand have more depth than the other, but
 profit incentive for firms to produce what consumers overall, both sides of the argument are
demand / consumer sovereignty considered and developed. There is
 competition results in efficiency which drives down costs thoughtful evaluation of economic
and prices concepts, terminology, information and/or
data appropriate to the question. The
 changes in wages move labour to those jobs most in
discussion may also point out the possible
demand
uncertainties of alternative decisions and
outcomes.
Why it might not:
 merit goods are under-consumed so not enough 2 A reasoned discussion which makes use of 3–5
resources are devoted to their production economic information and clear analysis to
 demerit goods are overconsumed so too many evaluate economic issues and situations.
resources are devoted to their production The answer may lack some depth and
 no resources are devoted to public goods as there is no development may be one-sided. There is
incentive to produce them relevant use of economic concepts,
 there may be factor immobility terminology, information and data
 monopolies may restrict output appropriate to the question.
 external costs and benefits will not be taken into
1 There is a simple attempt at using 1–2
account when deciding on the allocation of resources.
economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

3(a) Identify two objectives of private sector firms. 2 Reward but do not expect profit satisficing, revenue
maximisation, sales maximisation.
Two from:
 profit (maximisation) Allow social welfare.
 growth / high sales
 greater market share / market dominance If more than two objectives given, consider the first three.
 survival
 improving the environment

3(b) Explain one reason why the quantity of land may 4 One mark for identifying one reason why the quantity of land
increase and one reason why the quality of land may may increase and one mark for explaining that reason.
increase.
One mark for identifying one reason why the quality of land
Logical explanation which might include: may increase and one mark for explaining that reason.

Quantity of land
Reclamation (1) creating land from the sea (1).
Reduction in overfishing / hunting (1) restoring stocks of fish
/ wildlife (1).
Reduction in flooding (1) avoiding soil erosion (1).
Discovery of new natural resources (1) e.g. of oil (1).

Quality of land
Use of fertilisers (1) raising productivity / efficiency / fertility
of land (1).
Reduction in pollution (1) preventing damage / diseases (1).
Good weather (1) raising productivity efficiency / fertility of
land (1).
Better equipment / more advanced technology (1) raising
productivity efficiency / fertility of land (1).

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Question Answer Marks Guidance

3(c) Analyse how an increase in investment may affect 6 Credit fall in unemployment / rise in unemployment only
unemployment. once (1).

Coherent analysis which might include: Reference to cyclical / structural / technological

Spending on capital goods (1) will increase total demand (1) (unemployment) can be given an additional mark in each
firms may expand their output / new firms may set up / case if linked to a relevant point.
economic growth may occur (1) (may need more workers) to
work with the capital equipment / demand for labour may
increase / need more workers / increase job opportunities
(1) this can reduce cyclical (1) unemployment (1).
Investment in education / training/ healthcare / research and
development (1) can raise productivity / skills (1) increase
mobility (1) reduce structural unemployment (1).
Investment in infrastructure (1) increase geographical
mobility (1) reduce structural unemployment (1).
It could cause unemployment (1) as capital goods may
replace workers / production may become more capital-
intensive / demand for workers may decrease (1) capital
goods can be a substitute for labour (1) cause technological
unemployment (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a government should try to 8

Level Description Marks
prevent a rise in unemployment.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it should: information and clear and logical analysis
 may increase output / economic growth to evaluate economic issues and
 increase tax revenue situations. One side of the argument may
 reduce spending on unemployment benefit have more depth than the other, but
 reduce living standards / poverty overall, both sides of the argument are
considered and developed. There is
Why it should not: thoughtful evaluation of economic
 unemployment may be low concepts, terminology, information and/or
data appropriate to the question. The
 reduction in unemployment may cause inflation
discussion may also point out the possible
 the resulting higher incomes may cause a current uncertainties of alternative decisions and
account deficit outcomes.
 unemployment can create flexibility
 opportunity cost of government policy measures 2 A reasoned discussion which makes use of 3–5
 a government may have other objectives. economic information and clear analysis to
evaluate economic issues and situations.
The answer may lack some depth and
development may be one-sided. There is
relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

4(a) Identify two reasons why a government may set an 2 If more than two reasons given, consider the first three.
NMW.

Two from:
 to raise wages
 to reduce poverty / raise living standards
 reduce income inequality
 to correct market failure / ensure fair wages / prevent
exploitation of workers
 to encourage job seeking / reduce unemployment
 reduce emigration

4(b) Explain two causes of an increase in the value of a 4 Causes may be linked here in different ways.
country’s floating foreign exchange rate. Also allow explanation of two causes of an increase in
demand for the currency or two causes of a decrease in
Logical explanation which might include: supply of the currency.
Increase in demand for the currency (1) rise in exports / Credit higher demand mark only once and lower supply
exports exceeding imports / current account surplus (1) due mark only once.
to higher incomes abroad (1) lower inflation / deflation /
lower prices for exports (1) better quality (1).
Increase in foreign investment in the country (1).
Higher rate of interest (1) attracts hot money flows (1).
Speculation (1) that the currency will rise in value (1).
Decrease in supply of the currency (1) fall in imports / fall in
current account deficit (1) fall in incomes at home (1) lower
inflation / higher prices of imports / fall in quality of imports
(1).
The country’s firms reducing investment in other countries
(1)
Lower rate of interest in other countries (1) reduce hot
money going out of the country (1).
Speculation (1) that other currencies will fall in value (1).

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Question Answer Marks Guidance

4(c) Analyse how an increase in the price of milk may affect 6

the revenue earned by milk producers and soft drinks
producers.

Coherent analysis which might include:

Demand for milk is likely to fall / contraction in demand (1)
The effect on the revenue of milk producers will depend on
price elasticity of demand (1) if demand is elastic, revenue
will fall (1) as demand will fall by a greater percentage than
the rise in price (1) if demand is inelastic, or demand is
constant, revenue will increase (1) as demand will fall by a
smaller percentage than the rise in price (1).
Demand for soft drinks is likely to increase (1) the revenue
of soft drinks producers is likely to rise (1) as soft drinks are
a substitute / alternative to milk (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not small firms are more likely to go 8

Level Description Marks
out of business than large firms.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why they might: information and clear and logical analysis
 may have high average costs to evaluate economic issues and
 less able to take advantage of economies of scale situations. One side of the argument may
 may be less likely to get a loan from commercial banks have more depth than the other, but
 may have less retained profits overall, both sides of the argument are
 may be new, testing out whether there is demand, considered and developed. There is
inexperienced entrepreneurs thoughtful evaluation of economic
concepts, terminology, information and/or
data appropriate to the question. The
Why they might not:
discussion may also point out the possible
 less likely to experience diseconomies of scale uncertainties of alternative decisions and
 may receive financial assistance from the government outcomes.
 may have customer loyalty
 may be more flexible 2 A reasoned discussion which makes use of 3–5
 may be a monopoly in a niche / specialist market. economic information and clear analysis to
evaluate economic issues and situations.
The answer may lack some depth and
development may be one-sided. There is
relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

5(a) Identify the opportunity cost of households spending 2

their income and the opportunity cost of Chinese firms
exporting goods and services.

Saving (1) selling the products at home / consuming the

products (1).

5(b) Explain two reasons why some top sportspeople have 4 Reasons may be linked in different ways.
high earnings. Also allow explanation of two reasons for high demand or
two reasons for low supply.
Logical explanation which might include: Reward but do not expect high mrp of labour and derived
High demand / inelastic demand for top sportspeople (1) demand for labour.
large crowds watch top sportspeople / events (1) top sports
events can be sold to TV firms for large fees (1) high
merchandise sales / sponsorship deals / high gate receipts /
can generate high profits for firms (1).
Low supply / inelastic supply of sportspeople / lack of
substitutes (1) high bargaining power (1) top sports people
are skilled / talented (1) it may take years of training (1) high
level of experience (1) some sports are dangerous (1).

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Question Answer Marks Guidance

5(c) Analyse the reasons for imposing tariffs on imports. 6

Coherent analysis which might include:

To improve the current account balance (1) make imports
more expensive (1) reduce demand for imports / increase
net exports (1) increase total demand (1).
To protect domestic industries / infant industries / sunrise
industries (1) protect sunset / declining industries (1) protect
strategic industries (1) to increase economic growth (1)
reduce unemployment / increase employment (1) encourage
people to switch from buying imports to buying domestically
produced products (1).
To raise revenue (1) which the government can spend on
e.g. education / reduce a budget deficit (1).
To discourage the imports of harmful products / demerit
goods (1) example (1).
To prevent dumping / unfair competition (1) the selling of
products at less than cost price / the selling of products
produced by child labour (1).
To retaliate (1) against another country’s tariffs (1).
To prevent a fall in the exchange rate (1) to prevent switch
from domestic to foreign currency (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not a country with a high economic 8

Level Description Marks
growth rate will have a deficit on the current account of
its balance of payments. 3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite. argument, making use of economic
information and clear and logical analysis
Why it might: to evaluate economic issues and
 incomes will rise and consumers may buy more imports situations. One side of the argument may
 firms may switch products from foreign markets to the have more depth than the other, but
growing home market overall, both sided of the argument are
 firms may import more raw materials and capital goods considered and developed. There is
 the country may experience inflation which may reduce thoughtful evaluation of economic
its international price competitiveness concepts, terminology, information and/or
data appropriate to the question. The
discussion may also point out the possible
Why it might not:
uncertainties of alternative decisions and
 the economic growth may be export-led outcomes.
 economic growth may encourage more investment, this
could raise the quality of domestically produced 2 A reasoned discussion which makes use of 3–5
products and lower their prices economic information and clear analysis to
 higher tax revenue may result in improvements in evaluate economic issues and situations.
education and healthcare which could increase The answer may lack some depth and
productivity development may be one-sided. There is
 the country may impose trade restrictions / reduce relevant use of economic concepts,
exchange rate. terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/23
Paper 2 Structured Questions May/June 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre−U components, and some
Cambridge O Level components.

This document consists of 25 printed pages.

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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.

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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.

Social Science−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
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)

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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).

3 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical line of

MAX
thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy

Level 1

Level 2

Level 3

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Question Answer Mark Guidance

1(a) Calculate New Zealand’s GDP per head in 2020. 1 Accept the correct figure without the $ sign.

$39 000 (1)

1(b) Identify two external costs arising from the milk and car 2 If more than two costs given, consider the first three.
industries.

Air pollution (1).

Damages the environment (where wild animals live) (1).

1(c) Explain the impact on a cow farmer’s profits if they are 2

unable to find a different source of revenue.

Profit is revenue minus costs (1)

Profits will fall (1) due to reduction in quantity sold /
decrease in supply (1).
Less revenue (1) less income for farmers (1) farmers may
become unemployed (1).

1(d) Explain the two plans that the New Zealand government 4 One mark each for each of two plans identified and one
has to reduce external costs to the environment. mark each for each of two explanations.

Logical explanation which might include: Accept milk production for keeping cows.
End imports of petrol-powered cars by 2032 (1) decreasing
the number of petrol−powered cars in New Zealand / reduce
use of fossil fuels / by imposing an embargo/increasing the
price of petrol-power cars / increasing usage of greener /
electric cars (1).

Limit the number of cows that each farmer can have (1)
decreasing the amount of air pollution emitted by cows / less
habitat damaged by cows / government fines to those who
have more cows than permitted/ imposing regulations (1).

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Question Answer Mark Guidance

1(e) Draw a demand and supply diagram, to show the effect 4

of a cheaper substitute on the market for petrol-
powered cars.

Demand and supply diagram:

Axes correctly labelled – price and quantity or P and Q (1).
Original demand and supply curves correctly labelled (1).
New demand curve shifted to the left (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

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Question Answer Mark Guidance

1(f) Analyse the relationship between a country’s share of 5 Responses do not have to be in the format suggested but
world GDP (%) and its share of world carbon dioxide they should address the expected/normal relationship, offer
emissions (%). supporting evidence of that, highlight any exceptions to that,
and analyse the overall data.
Coherent analysis which might include:

Expected relationship:
Positive relationship (1) – the lower / higher total GDP as a
% of world GDP, the lower / higher the carbon dioxide
emission as a % of world GDP (1).

Supporting evidence:
up to 2 marks for relevant evidence e.g.
 New Zealand has the lowest total GDP as a % of world
GDP and lowest level of carbon dioxide emission as a
% of world carbon dioxide emissions
 Thailand has the second lowest total GDP as a % of
world GDP and second lowest level of carbon emissions
as % of world carbon dioxide emissions
China and USA have the two highest total GDP as a % of
world GDP and highest level of carbon emissions as a
% of world carbon dioxide emissions.

Analysis of expected relationship:

As countries produce more goods and services which
increases their GDP (1), their carbon emissions also
increase as more factories / energy / transport needed for
production (1).

Exception:
China/United States (1) China has 2nd highest GDP as a %
of world GDP after the US but China has the highest carbon
dioxide emission as a % of world GDP (1).

Analysis of exception:
e.g. China has a larger secondary sector / higher
percentage of heavy industries / larger population (1).
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Question Answer Mark Guidance

1(g) Discuss whether or not an increase in exports of clean 6 Apply this example to all questions with the command
and green products will help the New Zealand word DISCUSS
government achieve its macroeconomic aims. (1g, 1h, 2d, 3d, 4d and 5d)

Award up to 4 marks for logical reasons why it might, which Each point may be credited only once, on either side of an
may include: argument, but separate development as to how/why the
 Increase economic growth / GDP (1) as increased outcome may differ is rewarded.
exports lead to increased total demand (1) clean and
green products may have higher demand (1) and higher Generic example mark
prices (1)
 Reduce its current account of the balance of payment Tax revenue may decrease … 1
deficit (1) as value of exports will increase (1) increasing
net exports (1) more inflow into the current account / ... because of reason e.g. incomes may be lower. 1
increase in trade in goods inflow (1)
 Decrease unemployment (1) as more goods produced Tax revenue may increase because incomes may 0
(1) requires more workers (1) reduce poverty (1) be higher i.e. reverse of a previous argument.
 Improved HDI (1).
Tax revenue may increase because of a different 1
Award up to 4 marks for logical reasons why it might not, reason i.e. not the reverse of a previous argument
which may include: e.g. government spending on subsidies may
 Not all firms benefit (1) as some firms which are less stimulate the economy more than spending on
clean / green will lose revenues / profits (1) cut costs (1) education.
hire less workers (1) increase unemployment (1)
 Increased total demand (1) will lead to inflation (1) firms
increase the price of their products since demand is
higher (1) lower purchasing power of consumers / lower
real income (1).

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Question Answer Mark Guidance

1(h) Discuss whether or not job losses caused by a change 6

to a carbon−neutral economy will be harmful.

Award up to 4 marks for logical reasons why there might be

negative economic consequences, which may include:
 increased poverty (1) as fewer jobs means less income
(1) can’t afford basic necessities (1) such as shelter /
clothes / food (1) possibility of increased crime (1)
 huge losses in the other firms that serve these
communities (1) less spending in local shops (1) less
revenue / profit (1) may have to shut down (1)
 lost output (1) economy not producing at its full capacity
(1) unused resources (1) actual output lower than
maximum output (1) inefficient allocation of resources
due to the existence of labour who wants to work but
can’t find work (1)
 lost skills / lost motivation (1) occupational immobility
/can't find new jobs (1) cost of retraining workers (1)
 double effect on government finances (1) unemployed
don’t pay taxes (1) but get benefits (1) reduce
government revenue (1)
 may decrease government expenditure on other areas
(1)
 Unequal burden (1) structural unemployment (1)
increases inequality (1) youth and older individuals
more likely to be unemployed (1).

Award up to 4 marks for logical reasons why negative

economic consequences above may not occur:
 temporary (1) frictional unemployment (1) as other jobs
in carbon−neutral economy are available (1)

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Question Answer Mark Guidance

1(h)  an economy with a high mobility of factors of production

could avoid such problems (1) workers can move to
other industries (1) develop skills for jobs in the
carbon−neutral economy (1) if education / training is
provided (1).
 new jobs may be higher paid (1) boosting total demand
(1)
 better air quality leads to better health (1) improving
productivity (1)
 government spends less on health care (1) allowing
more to be spent elsewhere e.g. on education and
training (1).

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Question Answer Mark Guidance

2(a) Identify two types of cost to a firm. 2 Accept any relevant costs e.g. labour cost
Accept abbreviations e.g. TC
total cost (1) average total cost (1) fixed cost (1) variable If more than two costs given, consider the first three.
cost (1) average fixed cost (1) average variable cost (1)

2(b) Explain two roles of commercial banks for firms. 4 One mark each for each of two roles identified and one mark
each for each of two explanations.
Logical explanation which might include:
Provide loans / overdrafts to banks / source of finance (1) to If more than two roles given, consider the first three.
fund investments / expansion / start−up / day to day
operations (1).
Help process payments (1) internet banking / fund transfers /
credit card / debit card payments (1).
Issuing bank drafts / bank cheques (1) to help firms make
payments (1).
Safe place to store money / savings (1) firms making
deposits / earn interest (1).
Safekeeping of documents and other items (1) in safe
deposit boxes (1).
Currency exchange (1) to facilitate transfers between firms /
international transactions (1).
Provides insurance (1) to reduce various risks to the firm (1).

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Question Answer Mark Guidance

2(c) Analyse the causes of differences in the level of income 6 Alternatively, accept arguments which describes reasons for
between countries. lower incomes.

Coherent analysis which might include:

 difference in productivity (1) countries with higher
productivity have higher incomes (1) as workers can
produce more (1) and earn more money from their
production (1)
 difference in availability of natural resources (1) e.g.
valuable commodities such as oil or gold (1).
 difference in population growth (1) countries with higher
population growth have higher incomes (1) as there are
more people to produce goods and services (1) lower
labour costs (1) encourage more investments (1)
 differences in distribution of primary, secondary and
tertiary sectors / level of development (1) those with
higher secondary and tertiary sectors have higher
incomes (1) more value added (1) less dependent on
weather (1) higher productivity (1)
 difference in specialisation / diversification (1) level of
exports (1).
 difference in minimum wage level (1) affects the level of
total demand in a country (1)
 difference in level of saving and investment (1) higher
savings leads to higher investment (1) and higher
productivity growth (1) and therefore higher income
growth (1)
 difference in education levels (1) higher education levels
lead to higher incomes (1) workers have more
qualification / skills / experience (1) leading to higher
productivity / higher output (1)

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Question Answer Mark Guidance

2(c)  difference in health / healthcare standards (1) higher

health / healthcare standards lead to higher incomes (1)
less sick / healthier / stronger (1) produce more / higher
productivity leading to higher income (1).
 difference in unemployment rates (1) the more
unemployed resources a country has, the less income is
likely to be earned (1).
 differences in birth rates / proportion of elderly people
(1) high birth rate and ageing population may place high
demands on a country's resources (1)
 difference in frequency of war / natural disasters (1)
reducing a country’s ability to produce goods and
services (1)

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Question Answer Mark Guidance

2(d) Discuss whether or not low tax rates benefit an 8

Level Description Marks
economy.
3 A reasoned discussion which accurately 6−8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 low corporation tax rates encourage more investments to evaluate economic issues and
and therefore higher productivity growth which situations. One side of the argument may
encourages economic growth have more depth than the other, but overall
 low corporation tax rates encourage more investments both sides of the argument are considered
which increases demand for labour and reduces and developed. There is thoughtful
unemployment evaluation of economic concepts,
 low income tax rates encourage more people to enter terminology, information and/or data
the labour force appropriate to the question. The discussion
may also point out the possible
 low income tax rates increase disposable income which
uncertainties of alternative decisions and
can encourage higher consumer expenditure and, as a
outcomes.
result, higher output
 low indirect tax rates reduce cost of production which 2 A reasoned discussion which makes use of 3−5
reduces cost−push inflation economic information and clear analysis to
 low indirect tax rates reduce cost of production which evaluate economic issues and situations.
increases competitiveness of exports which reduces The answer may lack some depth and
current account deficit / increases current account development may be one−sided. There is
surplus relevant use of economic concepts,
terminology, information and data
Why it might not: appropriate to the question.
 low tax rates reduce government revenues which could
reduce spending on public goods / infrastructure, 1 There is a simple attempt at using 1−2
reducing investments / productivity growth economic definitions and terminology.
Some reference may be made to economic
 low tax rates increase production which increases
theory, with occasional understanding.
pollution and environmental degradation
 low direct tax rates may be inflationary 0 A mark of zero should be awarded for no 0
creditable content.

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Question Answer Mark Guidance

2(d)  low tax rates increase trade which increases need for
international transport such as ships and planes which
increases pollution
 low direct tax rates increase inequality
 low tax rates on demerit goods may worsen health /
result in market failure.
 low tax rates on imports (tariffs) may worsen the current
account of the balance of payments

Question Answer Marks Guidance

3(a) Identify two challenges facing small firms. 2 If more than two challenges given, consider the first three.

Two from: Accept any reasonable challenges facing small firms.

Raising finance (1)
May not be able to employ specialist staff (1)
Less well known (1)
Managing cash flow (1)
Survival / may have high level of competition (1)
Not able to take advantage of economies of scale / high
average cost (1)

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Question Answer Mark Guidance

3(b) Explain two possible opportunity costs for firms if they 4 One mark each for each of two opportunity costs identified
invest in the latest technology. and one mark each for each of two explanations.

Logical explanation which might include: If more than two opportunity costs given, consider the first
They may not be able to pay as much in wages (1) forgoing three.
having extra workers to help in their business / more skilled
workers (1)
They may not be able to get good quality raw materials (1)
sacrificing the quality of their product (1)
They may not be able to operate in a good location (1) more
difficult for customers to reach the firm (1)
They may not be able to buy land (1) for expansion (1)
They may not be able to spend on advertising / marketing /
spending on the brand (1) forgoing the opportunity to
increase demand (1)
Retained profits (1) could have been distributed to the
owners (1)

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Question Answer Mark Guidance

3(c) Analyse two causes of a fall in demand for a product 6 If more than two causes given, consider the first three.
such as Chinese food.

Coherent analysis which might include:

Decrease in price of substitutes / better quality substitutes
(1) increasing demand for substitutes (1) such as Indian
food or other kinds of food (1) there may be an increase in
the advertising of substitutes / better known rivals may enter
the market (1).
Increase in the price of complements (1) e.g. delivery
charges (1)
Decrease in income (1) decreasing demand for Chinese
food as people eat out less (1) as eating out is seen as
luxury goods (1).
Change in tastes / trends moving away from Chinese food
(1) increasing demand for other types of food (1)
Decrease in quality of Chinese food (1) lack of investments
(1) may be a health report about the advantages of eating
another type of food (1).
Lack of advertising (1) due to little investments in marketing
(1) less popular / less awareness of product (1).

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Question Answer Mark Guidance

3(d) Discuss whether or not competition is harmful to a firm. 8

Level Description Marks
In assessing each answer, use the table opposite. 3 A reasoned discussion which accurately 6−8
examines both sides of the economic
Why it might be: argument, making use of economic
 reduction in market share information and clear and logical analysis
 less revenues / less profits to evaluate economic issues and
 less growth situations. One side of the argument may
 less reinvested profits – less innovation have more depth than the other, but overall
 may need to lower prices / spend more in order to both sides of the argument are considered
compete and developed. There is thoughtful
evaluation of economic concepts,
 may be difficult to enter or stay in an industry if there are
terminology, information and/or data
large firms with low average costs
appropriate to the question. The discussion
may also point out the possible
Why it might not be: uncertainties of alternative decisions and
 less complacency outcomes.
 more innovation
 increase quality of goods and services produced 2 A reasoned discussion which makes use of 3−5
 domestic competition leads to international economic information and clear analysis to
competitiveness evaluate economic issues and situations.
The answer may lack some depth and
development may be one−sided. There is
relevant use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1−2

economic definitions and terminology.
Some reference may be made to economic
theory, with occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Mark Guidance

4(a) Define emigration. 2

Emigration is when people exit / leave (1) a country (1) to

live in another country (1).

4(b) Explain two causes of a recession. 4 If more than two causes given, consider the first three.

Logical explanation which might include:

Fall in total demand / low economic activity (1) due to lower
consumer confidence / falling consumption / falling
government spending / falling exports / increase imports (1)
Fall in investment (1) leading to fall in productive capacity (1)
Fall in population (1) e.g. due to emigration (1) leading to a
fall in number of workers (1)
Wars / natural disasters (1) causing destruction of factors of
production (1)
Higher interest rates (1) leading to lower borrowing /
consumption / investments (1)
Decreased consumer / investor confidence (1) decreasing
consumption / capital flight (1)
Higher income / corporation taxes (1) leading to falling
disposable income for consumption / falling after tax profits
leading to lower investments (1)
Lower productivity (1) reducing demand for the country’s
output (1).

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Question Answer Mark Guidance

4(c) Analyse policy measures a government could use to 6

attract workers to return to their home country.

Coherent analysis which might include:

Increase national minimum wage (1) attract more unskilled /
low−paid workers to return (1).
Expansionary fiscal policy / expansionary monetary policy
(1) to increase job opportunities (1).
Improved education / healthcare / housing (1) higher
pensions (1) to raise living standards (1).
Better working conditions / quality of life (1) regulations to
protect workers from poor treatment (1) better fringe benefits
e.g. holiday entitlement
Greater security in the country (1) e.g. gun controls (1)
Labour market reforms (1) making it easier for firms to hire
(1) more job opportunities (1) people return to take up a job
(1).
Lower direct taxes (1) increase after−tax income /
disposable income (1) could encourage more people to work
(1) and return to the country to earn income (1).
Deregulation (1) encourages more firms to start up (1) more
entrepreneurs will want to start a business (1) encouraging
more people to return to start their own business (1).
Improving incentives to work and invest (1) more
investments (1) more demand for workers (1) more job
opportunities (1).
Measures to reduce inflation (1) making lower cost of living
attractive (1)

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Question Answer Mark Guidance

4(d) Discuss whether or not an economy benefits from many 8

Level Description Marks
of its students studying abroad.
3 A reasoned discussion which accurately 6−8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 other countries may have better education system to evaluate economic issues and
enabling students to gain better skills / experiences situations. One side of the argument may
 when students return to the country, there will be higher have more depth than the other, but overall
productivity i.e. quality of factors of production increases both sides of the argument are considered
 learn about new technologies which could help the and developed. There is thoughtful
domestic economy in the future evaluation of economic concepts,
 make connections abroad which could help establish terminology, information and/or data
appropriate to the question. The discussion
future business contacts
may also point out the possible
 new ideas / products which could be brought back for uncertainties of alternative decisions and
the domestic economy outcomes.
 decrease poverty
 leads to further economic development. 2 A reasoned discussion which makes use of 3−5
 less spent on education by government economic information and clear analysis to
evaluate economic issues and situations.
Why it might not: The answer may lack some depth and
 students studying abroad might not return and stay in development may be one−sided. There is
the country they studied in (brain drain) relevant use of economic concepts,
 studying abroad is very expensive and lots of money is terminology, information and data
spent abroad instead of in the domestic economy appropriate to the question.
(money outflow)
1 There is a simple attempt at using 1−2
 only a small proportion of the society can afford economic definitions and terminology.
studying abroad increasing inequality Some reference may be made to economic
 Lack of development of higher / university education in theory, with occasional understanding.
the country due to lack of demand.
 If inflow of students from abroad is larger than outflow of 0 A mark of zero should be awarded for no 0
students, then there may not be a problem. creditable content.
 loss of potential consumption / growth in home country
 unemployment of teachers / lecturers in the country,
costs to government in benefits

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Question Answer Mark Guidance

5(a) Define government budget. 2

Government budget is a plan / forecast (1) for government

expenditure (1) and government revenue (1)

5(b) Explain, with examples, the difference between private 4

benefits and external benefits.

Logical explanation which might include:

Private benefits are benefits incurred by the consumers or
producers of a product (1) for example, getting a better job
in the future for those consuming education / profits that a
firm earns (1)

External benefits are benefits incurred by the third party (1)

for example, increased productivity due to better education
and better healthcare as a result of better qualified doctors
(1)

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Question Answer Mark Guidance

5(c) Analyse the reasons why workers employed in 6

education may earn more than workers employed in
other industries.

Coherent analysis which might include:

Higher demand for education workers (1) due to higher
demand for education than other industries (1) demand for
education workers is derived demand (1).
Lower supply (1) less people available to work in education
(1) e.g. not many qualified people want to become teachers /
lecturers (1).
Higher bargaining strengths (1) stronger trade unions (1)
e.g. teachers’ union is very strong.
Less discrimination (1) everyone is paid according to their
level of productivity (1) for example, female teachers less
discriminated than in other industries (1).
More favourable government policy for workers in education
/ government spends more on education (1) higher wages
set by the government for workers in education (1) as
education is essential for the economy / society (1).
More skilled (1) long-term training required (1) higher
productivity (1).
tertiary workers earn more (1) more value added (1).

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Question Answer Mark Guidance

5(d) Discuss whether or not having a large population is 8

Level Description Marks
beneficial for the economy.
3 A reasoned discussion which accurately 6−8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
 high labour supply – higher levels of factors of to evaluate economic issues and
production – high productive capacity – PPC shifts situations. One side of the argument may
outwards have more depth than the other, but overall
 workers can be taxed − enabling spending on public both sided of the argument are considered
services and developed. There is thoughtful
 high spending leads to high total demand –high evaluation of economic concepts,
economic growth terminology, information and/or data
appropriate to the question. The discussion
 high investment as firms can gain more profit
may also point out the possible
 high investment as firms can easily find more workers uncertainties of alternative decisions and
 high competition amongst workers – high quality / outcomes.
productivity of workers
 many entrepreneurs – increased competition – 2 A reasoned discussion which makes use of 3−5
increased innovation economic information and clear analysis to
 high demand for goods and services – increased output evaluate economic issues and situations.
of firms – economies of scale. The answer may lack some depth and
development may be one−sided. There is
Why it might not: relevant use of economic concepts,
 strain on resources – e.g. lack of proper housing, terminology, information and data
schools, hospitals appropriate to the question.
 external costs – e.g. pollution
1 There is a simple attempt at using 1−2
 high total demand could lead to increase demand−pull economic definitions and terminology.
inflationary pressures Some reference may be made to economic
 shortage of jobs – increased unemployment theory, with occasional understanding.
 it depends upon the composition of the population e.g.
large proportion of under 5's will not increase output in 0 A mark of zero should be awarded for no 0
the short run. creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/21
Paper 2 Structured Questions May/June 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 24 printed pages.

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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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical MAX

line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Please do NOT use this on live Too vague

scripts

Nothing creditworthy To be used when a candidate has misidentified a question

L0 they have answered. E.g.:
This is an answer to Q4c and not Q5c.

Level 1

Level 2

Level 3

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Question Answer Mark Guidance

1(a) Calculate the price elasticity of demand for coffee. 1 Accept 0.3

() 0.3 (1)

1(b) Identify two rewards to factors of production in 2 Only accept these answers if within the first three listed.
Nicaragua.

Wages (1) profits (1)

1(c) Explain one way in which unemployment is measured. 2 One mark for a way identified and one mark for an
explanation.
Claimant count (1) based on workers claiming
unemployment benefits (1).

OR

Labour force survey (1) asking people if they are out of work
and looking for employment (1).

1(d) Explain two functions of money in Nicaragua. 4 One mark each for each of two functions identified and one
mark for each of two explanations.
Medium of exchange (1) used to buy and sell products /
used to trade (1). Only accept these answers if within the first three listed.

Store of value (1) used to save / keeps its value over a

period of time (1).

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Question Answer Mark Guidance

1(e) Analyse the relationship between the percentage of the 4 Responses do not have to be in the format suggested but
labour force employed in agriculture and GDP per head. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.
Relationship:
Inverse or negative relationship / move in opposite directions Note the four are:
(1). Bahamas
Countries with a high percentage of their labour force Barbados
employed in agriculture tend to have a low GDP per head Costa Rica
(1). Saint Lucia

Supporting evidence:
The four countries with the lowest % of the labour force
employed in agriculture had the highest GDP per head (1)

Specific reference to one or more countries e.g. Bahamas

had the lowest % employed in agriculture and the highest
GDP per head (1).

Use of GDP per head data to show comparison between

country with high employment in agriculture and one with
low percentage employment in agriculture (1).

Analysis of expected relationship:

Wages may be low in agriculture (1) wages / value added
tends to be higher in the secondary and / or tertiary sector
(1).

Exception:
Nicaragua / Dominica (1) Nicaragua has the second highest
% of labour force employed in agriculture but the lowest
GDP per head / Dominica had the highest % of labour force
employed in agriculture but the second to lowest GDP (1).

Analysis of exception:
Explanation of another influence on GDP per head (1).

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Question Answer Mark Guidance

1(f) Analyse, using a demand and supply diagram, how a 5

drought could affect the market for coffee.

Coherent analysis which might include:

D&S diagram:

Axes correctly labelled – price and quantity or p and q (1).

Original demand and supply curves correctly labelled (1).
New supply curve shifted to the left (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

Written analysis:

A drought will lead to a shortage / will increase costs of

production (1).

OR

The lower supply will push up price / reduce quantity

(traded) (1).

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Question Answer Mark Guidance

1(g) Discuss whether or not small firms benefit Nicaraguan 6 Apply this example to all questions with the command
consumers. word DISCUSS
 1(g), 1(h), 2(d), 3(d), 4(d) and 5(d)
Award up to 4 marks for logical reasons why they might,
which may include: Each point may be credited only once, on either side of an
 know customers’ requirements (1) provide a personal argument, but separate development as to how/why the
service / see them often (1) may be flexible (1) outcome may differ is rewarded.
 may be many small firms / competitive markets (1)
prices may be low (1) quality may be high (1) may offer Generic example Mark
wider choice collectively than a few large firms (1)
 may provide products for which there is only a low Tax revenue may decrease… 1
demand (1) niche market (1)
 makes goods more accessible in rural areas (1). ...because of reason e.g. incomes 1
may be lower.
Award up to 4 marks for logical reasons why it might not,
which may include: Tax revenue may increase 0
 may not be able to take advantage of economies of because incomes may be higher
scale (1) examples (1) higher average cost of i.e. reverse of a previous
production (1) higher price (1) argument.
 small firms may have lower profits (1) may limit
investment / funds available (1) fail to raise quality (1) Tax revenue may increase 1
 may limit choice (1) individual small firms may have a because of a different reason i.e.
limited range of products (1) cannot provide all that not the reverse of a previous
consumers may want (1). argument e.g. government
spending on subsidies may
stimulate the economy more than
spending on education.

Only reward reference to quality or prices once.

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Question Answer Mark Guidance

1(h) Discuss whether or not Nicaragua should devote more 6 Do not expect, but reward reference to absolute or
of its resources to coffee production. comparative advantage.
Award up to 4 marks for logical reasons why it should, which
may include:
 global demand for coffee is increasing (1) demand for
coffee is price inelastic (1) revenue / profits may
increase (1) more tax revenue for government (1)
 firms grow in size (1) greater specialisation / economies
of scale may reduce average costs (1) raise quality (1)
increase profits (1) more competitive (1)
 exports may increase (1) improve the current account of
its balance of payments (1) lead to economic
growth/higher standard of living (1)
 may lead to more job opportunities (1) less poverty /
less government payments to unemployed (1)
 already twelfth biggest world producer (1) growth will
give them more monopoly power (1) more power to
raise price of coffee (1).
Award up to 4 marks for logical reasons why it should not,
which may include:
 other countries produce coffee (1) these may be more
competitive (1)
 output may be affected by changes in weather (1)
natural disasters (1) overproduction can exhaust land
(1) leading to lower yields in future (1)
 opportunity cost (1) resources could be used to produce
other products (1) example (1) coffee workers only
receive low pay (1)
 world market for coffee may fall / demand is
unpredictable (1) resulting in surplus capacity / wasted
resources (1)
 bmore dependent on other countries for imports of other
(agricultural) products (1)
 firms may suffer from diseconomies of scale (1) reduce
profits (1).

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Question Answer Mark Guidance

2(a) Identify two influences on the mobility of labour. 2 Only accept these answers if within the first three influences
mentioned.
Two from:
 age
 skills / training
 qualifications / level of education
 price / availability of housing
 cost of living /level of income
 family ties
 information on vacancies
 disabilities / access
 quality / cost of transport
 distance to place of work
 discrimination

2(b) Explain two benefits that consumers may gain from 4 One mark each for each of two benefits identified and one
having more commercial banks. mark for each of two explanations.
Logical explanation which might include:

More choice / competition (1) greater range of services /

better quality of services / lower bank charges (1).

Lower interest rate charged on loans / higher interest paid

on savings (1) due to higher competition (1).

May be easier to obtain a loan (1) which may increase the

products consumes can buy (1).

May be more convenient (1) closer to home / less time

travelling / more likely to be able to speak to a person (1).

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Question Answer Mark Guidance

2(c) Analyse why women may be paid less than men. 6 Allow the counter argument on why men may be paid more
Coherent analysis which might include: than women.

Women may be less skilled (1) have fewer qualifications (1)

and so be less productive (1) if they have received less
education / training (1) may have less bargaining strength
than men (1).

Fewer women may be in promoted posts (1) if they have

taken time off to raise children / maternity leave / may have
less experience (1).

Women may be concentrated in low paying occupations /

industries (1) example e.g. clothes manufacture (1) may only
want part-time jobs (1) because of family commitments (1).

Discrimination (1) some employers may underestimate /

undervalue the productivity of women (1) there may be no
law or an ineffective law against discrimination (1) example
e.g. tv presenters / football (1).

Lower demand / higher supply in some occupations (1) due

to lower revenue / value of product (1).

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Question Answer Mark Guidance

2(d) Discuss whether or not people living in countries with a 8 See Guidance table at the end of the mark scheme.
high GDP enjoy higher living standards than people in
countries with a low GDP.

In assessing each answer, use the table opposite.

Why they might:

 may be able to afford better standard of housing
 may be able to afford better nutrition and healthcare
which can increase life expectancy
 higher incomes enable more and greater quality of
products to be purchased
 may be able to afford better education which may
enable them to gain more interesting jobs with better
working conditions.

Why they might not:

 high GDP does not necessarily mean that GDP per
head is high and so incomes could be low
 income may be unevenly distributed, and some people
may be living in poverty
 may have a large informal sector so GDP under-records
income
 countries with higher GDP may also have higher price
levels
 people may work long hours and so enjoy little leisure
and may be stressed
 there may be pollution and traffic congestion
 people’s wants for goods and services may grow at a
faster rate than their income – the more people have,
the more they may want.

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Question Answer Mark Guidance

3(a) Identify who allocates resources in a mixed economic 2

system.

Firms / producers (1) the government (1)

OR

The private sector / private firms (1) the public sector /

nationalised firms (1)

3(b) Explain two benefits a firm may gain from an increase in 4 One mark each for each of two benefits identified and one
the size of the country’s population. mark for each of two explanations.

Logical explanation which might include:

Higher demand / more consumers / larger market (1) which

may increase revenue / profits (1).

May increase ability to take advantage of economies of

scale (1) lower average cost of production (1).

May be higher supply of labour (1) may make it easier to

employ workers / reduce wages (1) can increase output /
supply (1).

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Question Answer Mark Guidance

3(c) Analyse the reasons why governments aim for stable 6

prices.
Coherent analysis which might include:

Stable prices give consumers confidence to buy (1) prices

remain affordable / knowing they can afford it (1).

Stable prices attract MNCs (1) leads to greater employment

(1) government / firms more able to plan use of resources
(1) increases investment (1) and economic growth (1).

To avoid inflation (1) which can discourage investment due

to less certainty (1) could lead to lower wage demands (1)
can make exports more / imports less price competitive (1)
which may cause a current account deficit on the balance of
payments (1).

Inflation can cause a random redistribution of income (1)

lenders / savers may lose (1) borrowers may gain (1).

Inflation can cause menu costs (1) e.g. the cost of changing
prices (1) and may cause shoe leather costs (1) e.g. cost of
shopping around for lowest prices (1).

To avoid deflation (1) which can result in a downward spiral

of demand and prices (1) consumers and firms may delay
their purchases (1) this can result in a rise in unemployment
(1) and a recession (1).

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Question Answer Mark Guidance

3(d) Discuss whether or not the global economy would 8 See Guidance table at the end of the mark scheme.
benefit from an increase in air travel.

In assessing each answer, use the table opposite.

Why it might:
 may increase employment in the air travel industry
 may increase employment and output in related
industries e.g. tourism
 may reduce firms’ costs of production if quicker than
other forms of transport
 may increase mobility of labour
 air travel is a safer form of travel than e.g. road travel
 encourages tourism and economic development of
some countries.

Why it might not:

 may cause noise and air pollution (carbon footprint)
 may contribute to climate change
 may need to build new airports / extend existing airports
which may reduce land available for e.g. housing.
 may reduce demand for other forms of transport
 unemployment may increase in e.g. sea travel
 high costs prevent movement of heavy goods.

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Question Answer Mark Guidance

4(a) Define tertiary sector using an example apart from 2 Only accept the first example given.
healthcare.

The sector covering the provision of services (1).

Example e.g. banking / car showroom / coffee shop /

education (1).

4(b) Explain the difference between a private benefit and an 4

external benefit of healthcare.
Logical explanation which might include:

A private benefit is enjoyed by the person consuming the

product (1) e.g. a person may enjoy better health / longer life
expectancy (1).

OR

A provider of healthcare e.g. hospital (1) and revenue /

profits made (1).

An external benefit is a benefit enjoyed by a third party /

someone not directly involved in the consumption or
production of the product (1) e.g. less risk of catching a virus
when other people are vaccinated / higher output (1).

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Question Answer Mark Guidance

4(c) Analyse why a government may prevent a horizontal 6 Note: need both same industry and same stage of
merger. production to get the mark for horizontal merger.
Coherent analysis which might include:

A horizontal merger is a merger between two firms in the

same industry and same stage of production (1).

A government may prevent a merger if it thinks it will give

the new firm monopoly power (1) and result in market failure
(1).

Less competition may result in higher prices (1) lower quality

(1) there may be a substantial loss of jobs (1) through
rationalisation (1).

A government may be concerned that the new firm may be

too large (1) may experience diseconomies of scale (1)
example (1) may become less internationally competitive (1)
lower exports (1).

A government may want to avoid a reduction the number of

suppliers (1) resulting in less choice for consumers / less
innovation (1).

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Question Answer Mark Guidance

4(d) Discuss whether or not a foreign multinational company 8 See Guidance table at the end of the mark scheme.
(MNC) will continue to produce in a host country for
many years.

In assessing each answer, use the table opposite.

Why it might:
 may earn a high revenue / profit due to high demand
 may experience low costs due to low wages / low raw
material costs in the country
 may have access to high quality labour due to good
education and training in the country
 may be subsidised by the host country’s government.

Why it might not:

 natural resources it was extracting may run out
 tax in the host country may increase
 a rise in the host country’s foreign exchange rate may
increase the price of its exports
 there may be industrial action undertaken by trade
unions in the host country
 more profitable opportunities may occur in other
countries
 may be changes in regulations.

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Question Answer Mark Guidance

5(a) Identify how the effect of a fall in the price of gold would 2 Accept, as an alternative, a diagram showing a movement
be shown on a demand curve for gold. down the demand curve.

A movement down the demand curve (1) from left to right / Allow one mark for the idea that demand will rise.
extension (1).

A movement along the demand curve (1).

5(b) Explain two disadvantages of a recession. 4 One mark each for each of two disadvantages identified and
one mark for each of two explanations.
Logical explanation which might include:

Lower output / lower GDP (1) lower living standards / higher

poverty / less income / less consumer spending (1).

Higher unemployment / lower employment (1) higher cost of

unemployment benefit (1).

Lower investment (1) due to reduction in confidence (1).

Firms shutdown (1) due to lower profits (1).

Lower tax revenue (1) may cause budget deficit / reduce

ability to spend e.g. on education / increase in national debt
(1).

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Question Answer Mark Guidance

5(c) Analyse why a country may demand more imports. 6 Do not expect, but reward reference to absolute or
comparative advantage.
Coherent analysis which might include:
A maximum of three marks for only identifying the reasons.
Price of imports may fall (1) due to a fall in costs of
production (1) a rise in the exchange rate (1).

Quality of imports may rise (1) foreign workers may be less

skilled (1) investment in foreign countries may have
decreased (1).

Incomes may have increased (1) raising the purchasing

power of buyers (1) increasing the country’s’ need for
consumer goods (1) which the country cannot produce (1)
due to specialisation (1).

Trade restrictions may be removed or reduced (1) e.g. lower

tariffs / quotas / subsidies / embargoes will make it easier to
import (1).

Country needs more raw materials / lacks the technology to

produce certain goods (1) to enable growth of domestic
industries (1).

Failure of harvest /natural disaster e.g. rice (1) means need

to import the good instead (1).

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Question Answer Mark Guidance

5(d) Discuss whether or not fiscal policy can achieve full 8 See Guidance table at the end of the mark scheme.
employment.
Do not reward a simple reversal of policies in why it might
In assessing each answer, use the table opposite. achieve full employment in the why it might not part of the
response.
Why it might:
 higher government spending and/or lower taxation may
increase total (aggregate) demand which could reduce
cyclical unemployment
 government spending on education and training could
raise workers’ skills could increase their mobility and
may reduce frictional unemployment
 government spending on the provision of labour market
information may reduce frictional unemployment
 government spending on subsidies may lead to firms
increasing job opportunities.

Why it might not:

 government spending may not be raised enough / a cut
in taxation may not be sufficient
 consumer spending and investment may fall if there is a
lack of confidence
 net exports may fall if there is a global recession
 there may still be some labour immobility due to e.g.
differences in house prices in different parts of the
country so structural unemployment
 increased government spending on benefits may be an
encouragement not to work and stay unemployed.

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Guidance table for Question 2(d), 3(d), 4(d), 5(d)

Level Description Marks

3 A reasoned discussion which accurately examines both sides of the economic argument, making use of economic 68
information and clear and logical analysis to evaluate economic issues and situations. One side of the argument may have
more depth than the other, but overall both sides of the argument are considered and developed. There is thoughtful
evaluation of economic concepts, terminology, information and/or data appropriate to the question. The discussion may
also point out the possible uncertainties of alternative decisions and outcomes.

2 A reasoned discussion which makes use of economic information and clear analysis to evaluate economic issues and 35
situations. The answer may lack some depth and development may be one-sided. There is relevant use of economic
concepts, terminology, information and data appropriate to the question.

1 There is a simple attempt at using economic definitions and terminology. Some reference may be made to economic 12
theory, with occasional understanding.

0 A mark of zero should be awarded for no creditable content. 0

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Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions May/June 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 29 printed pages.

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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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer.
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an MAX

illogical line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without

any support

Caret – a word is missing Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

Please do not use

Nothing creditworthy To be used when a candidate has

L misidentified a question they have
answered e.g.:
This is an answer to Q4(c) and not Q5(c).

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate Tunisia’s balance on the current account of its 1 Accept –2.4bn.
balance of payments. Also accept –6.8 or –6.9 billion TND.

–$2.4bn

1(b) Identify two qualities of a good tax that the Tunisian 2 If more than 2 qualities are given, consider the first 3.
government aimed to achieve.

Efficiency / efficient / the tax should improve market

performance / reduce market failure (1).
Economical / economy / the tax should raise more in
revenue than it costs to collect it (1).

1(c) Explain one reason why the Tunisian government 2 One mark for a reason identified and one mark for an
regulates the price of flour and milk. explanation.

Reduce poverty (1) flour and milk are basic necessities

/essential products / people may be able to buy enough
basic necessities / make them affordable / keep price
relatively low (1).
Or
Prevent monopoly firms exploiting their market power (1)
stop the firms raising price to a high level (1).

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Question Answer Marks Guidance

1(d) Explain two ways the Tunisian government tried to 4 One mark for each of two ways identified and one mark for
reduce frictional unemployment. each of two explanations.

Logical explanation which might include: If more than 2 ways are given, consider the first 3.

Increased the labour market information available to workers

and employers (1) so workers would be more aware of job
vacancies / skills and qualifications required / employers
more aware of those seeking jobs / may enable workers to
move more quickly/easily between jobs / reduce search time
/ increase mobility of workers (1).

Did not raise unemployment benefit (in line with inflation) (1)
so, the purchasing power of unemployment benefit would fall
/ increase the incentive to work (1).

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Question Answer Marks Guidance

1(e) Analyse the relationship between the change in 4 Responses do not have to be in the format suggested but
Tunisia’s average wage and the inflation rate. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Relationship (up to 2 marks) and analyse the overall data.
Direct relationship / positive relationship (1) as change in the
average wage increases so does the inflation rate / if Note: average wage did not fall.
change in average wage / rise in average wage falls so does
the inflation rate / both fall and rose together / same trend
(1).
Evidence (up to 3 marks)
2016 – 2017 / 2018 both the average wage / change in
average wage and inflation rate rose (1).
Between 2014 – 2018, the average wage rose more rapidly
than the inflation rate (1) real wages would have increased
between 2014 – 2018 (1).
Between 2018 – 2020 / in 2019 – 2020, the inflation rate
was higher than the rise in the average wage (1) real wages
would have fallen (1).
Between 2014 – 2015/2016 / 2018 – 2019/2020 both the
change in average wage and inflation rate fell (1).
2018 had the highest rise in the average wage and the
highest inflation (1).
2016 had the lowest increase in the inflation rate but not the
lowest increase in the average wage / 2020 had the lowest
increase in the average wage but not the lowest inflation
rate (1).
Over the whole period the inflation rate rose while the
increase in the average wage fell (1).
Explanation (up to 2 marks)
A rise in the average wage may increase costs of production
/ cause cost push inflation / a higher inflation rate will
encourage workers to press for a wage rise (1).
A rise in the average wage may increase disposable income
/ consumer expenditure / total demand / cause demand-pull
inflation (1).
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Question Answer Marks Guidance

1(f) Analyse, using a demand and supply diagram, how an 5 Note: higher price needs to be linked to higher costs of
increase in wage costs would affect the market for production/higher costs/higher wage costs.
shoes.

Coherent analysis which might include:

D&S diagram:
Axes correctly labelled – price and quantity or p and q (1).
Original demand and supply curves correctly labelled (1).
New supply curve shifted to the left (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

Written analysis:
An increase in wage costs would increase costs of
production which may raise price (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not the Tunisian government should 6 Apply this example to all questions with the command
continue to subsidise electricity production. word DISCUSS
(1g, 1h, 2d, 3d, 4d and 5d)
Award up to 4 marks for logical reasons why it might, which
may include: Each point may be credited only once, on either side of an
 reduce costs of producing electricity (1) increase supply argument, but separate development as to how/why the
of electricity (1) lower price of electricity (1) make outcome may differ is rewarded.
electricity more affordable / reduce poverty (1)
 lower costs of firms that use electricity (1) which may Generic example Mark
encourage them to expand / attract MNCs / increase
output / increase GDP / cause economic growth (1) Tax revenue may decrease… 1
increase employment / lower unemployment (1)
 reduce inflation / firms lower prices (1) make Tunisia’s ...because of reason e.g. incomes may be 1
products more internationally competitive / increase lower.
exports / lower imports / improve the current account
balance (1) Tax revenue may increase because 0
 may reduce pollution / external costs (1) if subsidising incomes may be higher i.e. reverse of a
green sources of energy (1). previous argument.

Award up to 4 marks for logical reasons why it might not, Tax revenue may increase because of a 1
which may include: different reason i.e. not the reverse of a
 electricity firms may rely on the subsidy (1) may not previous argument e.g. government
keep costs low / become inefficient (1) may not pass on spending on subsidies may stimulate the
the subsidy in the form of lower price (1) economy more than spending on education.
 opportunity cost (1) government could spend money on
e.g. healthcare (1)
 may result in a budget deficit / increase in taxes (1)
 may cause pollution / external costs (1) if e.g. coal
powered / deplete non-renewable resources (1).

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Question Answer Marks Guidance

1(h) Discuss whether or not a rise in the value of the 6 Note: lower total demand may be credited on either side but
Tunisian dinar would benefit the Tunisian economy. only once.

Award up to 4 marks for logical reasons why it might, which Note: the generic advice above in terms of MNCs. One
may include: mark for attract or discourage MNCs. Another mark could be
 may reduce inflation (1) imports would be cheaper (1) gained by explaining why they may be attracted and another
enable households to buy more imports / higher mark for explaining why they may be discouraged.
purchasing power (1) more choice (1) may lower price
of some raw materials and/or capital goods (1) increase
competitive pressure on domestic firms (1) lower costs
of production (1)
 lower total (aggregate) demand (1) which may reduce
demand-pull inflation (1)
 may be taken as an indicator of a strong economy /
increase confidence (1) encourage investment / attract
MNCs (1)
 if demand for exports is price inelastic, export revenue
may rise (1).

Award up to 4 marks for logical reasons why it might not,

which may include:
 higher export prices / may reduce exports / export
revenue (1) lower price of imports (1) may increase
imports / import expenditure (1) reduce international
competitiveness (1) increase the deficit / reduce surplus
on the current account of Tunisia’s balance of payments
(1)
 lower net exports may reduce GDP / economic growth
(1) which may increase unemployment / reduce
employment (1)
 may discourage MNCs / investment (1) because of
higher cost of setting up in the country (1).

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Question Answer Marks Guidance

2(a) Identify two possible opportunity costs of producing 2 If more than 2 are given, consider the first 3.
primary sector products.

Secondary sector products / capital goods / manufactured

goods (1) tertiary sector products / services (1)
Wildlife habitats/quality of the ecosystem (1)

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Question Answer Marks Guidance

2(b) Explain two policy measures which may reduce poverty. 4 One mark each for each of two policy measures identified
and one mark for each of two explanations.
Logical explanation which might include:
If more than 2 policy measures are given, consider the first
Introduce / increase minimum wage (1) help low-paid 3.
workers / raise income of low-paid workers (1).
Provide state benefits (1) e.g. unemployment benefit can Explanation marks e.g. reduce unemployment can be given
enable those who have lost their jobs to purchase basic without identification of policy measure as a candidate may
necessities (1). write e.g. use a policy measure that will reduce
Reduce indirect taxation (1) tax on goods and services tends unemployment.
to fall more heavily on the poor (1).
Provide education / training (1) increase earning potential /
income / employment opportunities (1).
Job creation schemes / increase jobs in the public sector (1)
e.g. expanding state-owned firms / increase employment /
raise incomes / Subsidising private sector firms (1) lower
prices (1).
Reduction in interest rate / expansionary monetary policy (1)
encouraging firms to expand / take on more workers (1).
Increase in government spending (1) increase employment
opportunities (1).

Reduce direct taxation / expansionary fiscal policy (1) which

may encourage firms to expand and take on more workers /
increase disposable income (of the poor) (1).
Progressive taxes (1) reduce relative poverty (1).
Provide job information (1) reduce frictional unemployment
(1).
Introduce a maximum price (1) to make necessities more
affordable (1).

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Question Answer Marks Guidance

2(c) Analyse how the closure of firms may harm consumers. 6 Focus should be on consumers.

Coherent analysis which might include: One mark in total for higher price.

May reduce competition (1) increase monopoly power /

market share (1) may result in higher prices (1) may not
innovate / spend on R&D / become inefficient / complacent
(1) lower quality (1) slower to respond to changes in
consumer demand (1).
May mean that consumers have to travel further to purchase
products (1) may take time to find alternatives (1) there may
be a reduction in the range of products available / less
choice / less variety (1) lower quantity / it may not be
possible to buy some products (1).
May reduce consumer confidence (1) lowering quality of life
/ reduce consumer welfare / living standards (1).
May reduce external economies of scale (1) example (1)
raise average cost (1) which may raise price (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not a government should encourage 8

Level Description Marks
people to walk to school and work.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
 may make people healthier logical analysis to evaluate economic
 may raise productivity issues and situations. One side of the
 may reduce healthcare costs argument may have more depth than
 may reduce pollution and traffic congestion the other, but overall both sides of the
 may be less need for car parking space. argument are considered and
developed. There is thoughtful
Why it might not: evaluation of economic concepts,
 may not be safe terminology, information and/or data
 may make people late appropriate to the question. The
 may increase stress and lower productivity discussion may also point out the
 may reduce demand for bus and train use possible uncertainties of alternative
 may cause some bus and train drivers to lose their jobs decisions and outcomes.
 may restrict job choice due to distance from home.
2 A reasoned discussion which makes 3–5
use of economic information and clear
analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Marks Guidance

2(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Marks Guidance

3(a) Identify the difference between microeconomics and 2

macroeconomics.

Microeconomics is concerned with individual markets /

individual decisions / individual firms / households (1).
Macroeconomics is concerned with the whole economy (1).

3(b) Explain how less education can reduce a person’s 4

lifetime earnings.

Logical explanation which might include:

May reduce qualifications (1) lower mobility (1) reduce

chance of gaining employment / increase chance of
experiencing unemployment (1) may lack information on job
vacancies (1) may be more likely to work in the primary
sector / do manual work (1).
May reduce skills / adult literacy (1) lower productivity (1)
reduce chance of gaining promotion (1).
May have less bargaining power / less aware or less able to
enforce labour market rights e.g. to a minimum wage (1) as
easier to replace (1) lower demand for them / higher supply
(1).
May reduce understanding about the benefits of good
nutrition / good healthcare (1) experience more time off work
/ shorter life expectancy (1).
May have large families (1) be out of the labour force for
some time (1).
May lack financial awareness / lower savings (1) reduce
ability to buy equipment e.g. a computer that could increase
earnings (1).

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Question Answer Marks Guidance

3(c) Analyse how the introduction of a minimum wage could 6 One mark in total for increase unemployment and / or
affect unemployment. increase employment.

Coherent analysis which might include: One mark for reduce output and / or increase output.

A minimum wage is the lowest amount that an employer can Supply exceeding demand for labour / surplus supply of
pay a worker / price (wage) floor (1). Its introduction may labour may be shown on a diagram.
result in the supply of labour exceeding demand for labour /
surplus of labour (1) resulting in higher unemployment (1). Award but do not expect a reference to lower real wage
Firms may have to pay higher wages / wages may increase unemployment.
(1) may want to cut costs of production / higher wages may
increase their costs of production (1) this may reduce their
profits (1) reduce output (1) they may fire some of their
workers / increase unemployment (1) replace workers with
machines / capital goods (1).
Higher pay may increase productivity (1) increase total
demand (1) which may encourage firms to increase output
(1) take on more workers / increase employment (1) reduce
cyclical unemployment (1).
May increase the incentive to work (1) reduce frictional
unemployment (1).
If the minimum wage is set below the equilibrium level it will
have no effect (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not an economy with a high inflation 8

Level Description Marks
rate will have a low economic growth rate.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
 may make the country’s products less internationally logical analysis to evaluate economic
competitive issues and situations. One side of the
 lower exports and increase imports argument may have more depth than
 reduce total demand the other, but overall both sides of the
 may discourage investment argument are considered and
 if caused by increases in costs of production (cost-push developed. There is thoughtful
inflation may reduce output) evaluation of economic concepts,
 hyperinflation may result in a collapse in the economic terminology, information and / or data
system. appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of alternative
 may be caused by increases in total demand / demand- decisions and outcomes.
pull inflation which may encourage higher output / GDP
 may increase tax revenue which could be spent on e.g. 2 A reasoned discussion which makes 3–5
education which could increase the economic growth use of economic information and clear
rate in the long run analysis to evaluate economic issues
 may reduce the real cost of borrowing which may and situations. The answer may lack
increase consumer spending and investment some depth and development may be
 may be lower than rival countries’ inflation rates. one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Marks Guidance

3(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Marks Guidance

4(a) Identify two reasons why tax revenue is likely to fall 2 If more than 2 reasons are given, consider the first 3.
during a recession.

Two from:
 lower spending / lower demand
 lower incomes / lower wages / higher unemployment /
lower employment
 lower profits
 lower tax rates
 lower imports
 fewer tax payers
 lower output
 lower revenue

4(b) Explain two characteristics of money. 4 One mark each for each of two characteristics identified and
one mark for each of two explanations.
Logical explanation which might include:
If more than 2 characteristics are given, consider the first 3.
Generally acceptable (1) people willing to accept it as a
payment / reward / in settlement of a debt (1). Accepting ‘breakable’ for ‘divisible’.
Portable (1) easy to carry (1).
Recognisable (1) easy to see it is the country’s currency (1). Explanation marks e.g. maintain value or accept as a
Durable (1) will last some time / can be saved (1). payment can be given without identification up to a
Limited in supply (1) so maintains value (1). maximum of 2 marks.
Divisible (1) there should be units of different value (1).
Homogeneous / uniform (1) people not preferring e.g. one
note of a certain value other another note of the same value
(1).

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Question Answer Marks Guidance

4(c) Analyse the advantages an economy may gain from 6 No marks for general benefits of emigration.
having some of its people working in other countries.

Coherent analysis which might include:

The workers may send money home to (support) their

families staying at home (1) reduce poverty / raise living
standards (1).
Will improve the current account position of the balance of
payments / bring in foreign currency (1) secondary income
(1).
The workers may receive training (1) gain skills (1) ideas /
knowledge / awareness of new technology (1) experience
(1) higher productivity / efficiency (1) which they can bring
back to the country (1) increase quality of output (1).
Start their own firms in the country when they return (1)
increase output / economic growth / increase GDP (1).
May reduce unemployment (1) if lack of jobs at home (1)
and so may reduce government spending on unemployment
benefits / may reduce government spending on dependents
(1).

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Question Answer Marks Guidance

4(d) Discuss whether or not consumers would benefit from 8 Focus should be on consumers and not workers.
firms buying new capital equipment.
Level Description Marks
In assessing each answer, use the table opposite.
3 A reasoned discussion which 6–8
Why they might: accurately examines both sides of the
 may embody new technology economic argument, making use of
 more innovation / new products economic information and clear and
 may increase efficiency / lower costs of production logical analysis to evaluate economic
 may lower prices issues and situations. One side of the
 may reduce mistakes argument may have more depth than
 increase quality of output the other, but overall both sides of the
 may increase output and so availability. argument are considered and
developed. There is thoughtful
Why they might not: evaluation of economic concepts,
 may raise prices in the short run to cover the cost of the terminology, information and/or data
purchase appropriate to the question. The
 may reduce quality / output in the short run as workers discussion may also point out the
get used to the new capital equipment possible uncertainties of alternative
 firms may switch from producing consumer to capital decisions and outcomes.
goods
 products may become more standardised. 2 A reasoned discussion which makes 3–5
use of economic information and clear
analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

4(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Marks Guidance

5(a) Identify two free goods. 2 BOD on ‘sun’, trees (not wood), wild flowers, wild fruit. Not
accepting fish or stone.
Two from e.g.:
 air / oxygen
 sunlight
 water
 wind

5(b) Explain two influences on demand for factors of 4 One mark each for each of two influences identified and one
production. mark for each of two explanations.

Logical explanation which might include: If more than 2 influences are given, consider the first 3.
Demand for the product produced / total demand / economic
activity (1) rise in demand for the product/products will be Accept price and / or demand on its own but looking for price
likely to increase demand for the factor/factors of production of a complement or price of a substitute not just complement
/ derived demand (1). or substitute.
Price of the factor itself (1) lower price will be likely to result
in higher demand (1).
Price of substitute factors of production (1) e.g. may demand
more labour if price of capital rises (1).
Price of complementary factors of production (1) e.g. if
labour is used with capital, a fall in the price of capital may
increase demand for labour (1).
Productivity (1) higher productivity will be likely to increase
demand (1).
Quality / advances in technology / changes in standards of
education and training (1) higher quality will increase
demand (1).
Occupational mobility (1) the more occupationally mobile,
the higher demand will tend to be (1).
Method of production (1) switch from labour-intensive
production will increase demand for capital goods (1).

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Question Answer Marks Guidance

5(c) Analyse the effect of an increase in demand for football 6 Changes in demand may be shown in the written answer or
shirts on demand for football shorts and demand for on diagrams.
basketball shirts.

Coherent analysis which might include:

Demand for football shorts is likely to increase (1) football

shirts and shorts are complements (1) bought to be used
together / bought to complete the set (1).
Demand for basketball shirts is likely to fall (1) basketball
shirts and football shirts may be substitutes (1) consumers
may switch between them (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not an increase in government 8

Level Description Marks
spending on housing would benefit an economy.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
 may increase total demand logical analysis to evaluate economic
 may increase output / GDP issues and situations. One side of the
 may increase employment / reduce unemployment argument may have more depth than
 may lower the price of housing the other, but overall both sided of the
 may increase living standards argument are considered and
 may reduce homelessness developed. There is thoughtful
 may reduce poverty. evaluation of economic concepts,
terminology, information and/or data
Why it might not: appropriate to the question. The
 will have an opportunity cost discussion may also point out the
 may increase taxes possible uncertainties of alternative
 quality of housing may be low decisions and outcomes.
 private sector may provide better housing
 may be external costs during the construction. 2 A reasoned discussion which makes 3–5
use of economic information and clear
analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Marks Guidance

5(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/23
Paper 2 Structured Questions May/June 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the May/June 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 27 printed pages.

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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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
 The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
 If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown
 Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages
 Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical line of MAX

thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any

support

Caret – a word is missing Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy

Level 1

Level 2

Level 3

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Question Answer Mark Guidance

1(a) Calculate the percentage contribution of Jakarta to 1 Accept without the percentage sign.
Indonesia’s GDP in 2021.

27.3%, 27.27%, 27.2%, 27%

1(b) Identify two examples of external costs ignored by the 2

free market.

air pollution (1) rising sea levels/floods (1) disease /

mosquitoes (1) climate change (1)

1(c) Explain how real GDP per head can be an indicator of 2 Accept answers based on either higher or lower GDP per
living standards. head.

Real GDP per head has been adjusted for population /

inflation / takes account of the cost of living (1).
Low real GDP per head leads to a fall in living standards (1)
because lower GDP per head would mean lower income /
real GDP per head is average income (1) reducing
consumption / material wellbeing / influencing how much
people can spend / whether they can buy basic necessities
(1).

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Question Answer Mark Guidance

1(d) Explain two ways climate change can lead to a fall in the 4 One mark each for each of two ways identified and one
Human Development Index (HDI) of Indonesia. mark for each of two explanations.

Logical explanation which might include: Accept an explanation combining two different ways, e.g.
increase in diseases reducing education levels.
Schools have been flooded (1) reducing education levels /
mean years of schooling / expected years of schooling (1).

Floods have led to an increase in diseases (transmitted

through water and mosquitoes which breed in water) (1)
reducing health level / life expectancy / increasing death rate
(1).

Farmland has been submerged, (cutting off a vital source of

income of many farmers) / roads have been destroyed (1)
reducing income levels / GNI per capita / GDP per capita /
living standards (1).

1(e) Draw a production possibility curve (PPC) diagram to 4

show the impact of climate change on an economy such
as Indonesia.

PPC diagram:
Axes correctly with different outputs (1).
Initial curve drawn as a curve/line sloping downward to the
axes (1).
New curve drawn as a curve/line sloping downward to the
axes (1).
Shift to the left indicated by arrow(s) or letters or numbers
e.g. PPC1 to PPC2 (1).

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1(f) Analyse the relationship between GDP and government 5 Responses do not have to be in the format suggested but
spending on the environment. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.
Expected relationship: direct relationship / move in the same
direction (1) higher GDP may lead to higher government
spending on the environment / higher government spending
on the environment may increase GDP (1).

Supporting evidence: Japan has highest GDP and highest

spending on environment (1) France has second highest
GDP and second highest spending on environment (1)
Thailand has lowest GDP and lowest spending on
environment (1).

Analysis: Higher GDP may create more pollution, therefore

countries have more to spend on environment / high
government spending on the environment can reduce
pollution/climate change (1). Higher tax revenue / more
education and so more concern for the environment / a
cleaner environment can raise productivity (1). Higher GDP
therefore more developed and can spend more on other
objectives such as protection of the environment (1).

Exception: Switzerland/Indonesia (1) Switzerland has lower

GDP than Indonesia but higher expenditure on environment/
Indonesia has higher GDP and lower expenditure on
environment than Switzerland (1).

Analysis of the exception: These countries may be facing

different pressures on government spending e.g. higher
level of poverty (1).

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Question Answer Mark Guidance

1(g) Discuss whether or not internal migration benefits an 6 Apply this example to all questions with the command
economy such as Indonesia. word DISCUSS
(1g, 1h, 2d, 3d, 4d and 5d)
Award up to 4 marks for logical reasons why it might, which
may include: Accept the reverse argument, (e.g. for Q1g internal
 higher production of different crops (1) more income / migration may be to a less polluted area) but recognise that
higher living standards (for farmers) (1) each point may be credited only once, on either side of an
 less pressure on government resources / natural argument, but separate development as to how/why the
resources (1) e.g., less overcrowding (1) less spending outcome may differ is rewarded.
on healthcare if people move away from areas of
flooding/ mosquitoes (1) Generic example mark
 labour force may increase in some areas (1) moving
from low productivity areas to high productivity areas(1) Tax revenue may decrease… 1
increasing output (1)
 housing may be cheaper / more available in some areas ...because of reason e.g. incomes may be 1
(1) reducing cost of living for workers (1) lower.
 migration may be to high wage areas (1) boosting total
demand (1) Tax revenue may increase because incomes 0
 fewer resources may be wasted (1) if migration is to an may be higher i.e. reverse of a previous
area where they are under-used e.g. schools, hospitals argument.
(1).
Tax revenue may increase because of a 1
Award up to 4 marks for logical reasons why it might not, different reason i.e. not the reverse of a
which may include: previous argument e.g. government spending
 as workers migrate, it could also lead to the collapse of on subsidies may stimulate the economy more
entire communities (1) without workers (1) less demand than spending on education.
for goods and services in the area (1)
 increased inequality between more mobile labour and
less mobile labour (1) as some workers who cannot
move will not be able to find jobs (1) and gain higher
income (1)
 more pressure on government resources in areas they
move to (1) more overcrowding in those areas / housing
shortages (1) external costs (1) more pollution /
congestion (1).

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Question Answer Mark Guidance

1(h) Discuss whether or not relocating the capital city from 6

Jakarta will benefit the Indonesian economy.

Award up to 4 marks for logical reasons why it might, which

may include:
 the new city will provide new job opportunities (1)
decreasing unemployment in Indonesia (1) increasing
incomes / economic growth (1)
 reduce inequality between the different regions of
Indonesia (1) reducing social dissatisfaction / increase
standards of living of everyone in Indonesia (1)
 better environment as new city is carbon-neutral / less
pollution (1) reduced external costs (1)
 better health for population of Indonesia (1) higher
productivity (1)
 fewer floods that require expenditure to repair the
damage (1)
 foreign investors may be more willing to relocate to
Indonesia (1).

Award up to 4 marks for logical reasons why it might not,

which may include:
 cost of the move may be too high (1) opportunity cost in
terms of other areas of government spending (1) e.g.
education / healthcare in other regions (1) could result
in higher taxes / government budget deficit (1)
 the relocation is expected to benefit only a small
number of people who already have the financial capital
/ connection to the government (1) inequality could rise
(1)
 people may be reluctant to leave Jakarta (1) causing the
resources invested in the new city to be wasted (1).

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Question Answer Mark Guidance

2(a) Define secondary sector using an example apart from 2 Accept covers manufacturing / production of goods.
construction.
The sector covering construction and manufacturing / the
sector that processes raw materials (1) e.g. car
manufacturing (1).

2(b) Explain two key resource allocation decisions. 4 One mark each for each of two decisions identified and one
mark for each of two explanations.
Logical explanation which might include:
Accept answers based on resource allocation decisions
 what to produce (1) a decision on what types of made by firms e.g. demand for a firm's products.
products that an economy needs to produce e.g. capital
goods vs consumer goods / necessities vs luxuries (1)
 how to produce (1) seeking the most efficient methods /
where the methods to produce the goods and services
needs to be decided / capital-intensive vs labour-
intensive (1)
 for whom to produce (1) for those who can pay for the
goods and services / for the target market / sector of the
economy for whom the goods should be produced /
those who need it vs those who want it (1).

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Question Answer Mark Guidance

2(c) Analyse why workers may want to migrate to another 6 Accept internal and external migration.
area.
Maximum of 3 marks for identifying reasons.
Coherent analysis which might include:
 to gain higher incomes (1) as there are more / better
jobs opportunities available in another area / more
opportunities to use skills (1) since there are more
employers / economic activity (1)
 to have better living standards (1) better public
amenities (1) such as better health and education
facilities (1)
 to move from areas with housing shortages (1) for
cheaper / better housing (1)
 to move from areas where prices / cost of living is high
(1) move to area with lower taxes (1) increase
purchasing power / living standards (1)
 to have better working conditions (1) more job security
(1)
 to be closer to friends / family (1) who have migrated
previously (1)
 to escape wars / high crime (1) more security (1) to
avoid losing lives / lives of family members (1)
 to gain more freedom (1) fewer laws / restrictive
regulations (1)
 climate change (1) original area no longer habitable /
cannot plant crops (1) relocate to areas where there are
better soil / fewer floods / fewer natural disasters / less
pollution (1).

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Question Answer Mark Guidance

2(d) Discuss whether or not a government should introduce 8

Level Description Marks
a maximum price on housing.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
 reduces price of housing / makes housing more logical analysis to evaluate economic
affordable issues and situations. One side of the
 to control (cost-push) inflation argument may have more depth than
 to improve labour mobility / increase labour force the other, but overall both sides of the
available argument are considered and
 ensures everyone has shelter, a basic necessity developed. There is thoughtful
 leaves enough money to buy other needs and wants, evaluation of economic concepts,
increasing living standards terminology, information and/or data
 less inequality / reduces relative poverty. appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of alternative
 discourages firms from supplying housing / reduces decisions and outcomes.
profits
 may reduce housing quality if firms wish to maintain 2 A reasoned discussion which makes 3–5
profit levels use of economic information and clear
 shortage of housing if maximum price is below the analysis to evaluate economic issues
equilibrium and situations. The answer may lack
 no effect if maximum price is set above the equilibrium some depth and development may be
price one-sided. There is relevant use of
 creation of informal markets at higher prices – lower economic concepts, terminology,
standards information and data appropriate to
 maximum prices might still be too high and unaffordable the question.
 the maximum price introduced may not take location
1 There is a simple attempt at using 1–2
into account.
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Mark Guidance

Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Mark Guidance

3(a) Identify two pairs of products, not in the gaming 2 Accept any relevant pairs of products: 1 mark for each pair.
industry, which are substitutes.
 tea and coffee (1)
 Netflix and Disney streaming services (1)
 iPhones and Android Phones (1)
 glasses and contact lenses (1)

3(b) Explain two reasons why a firm’s revenue may increase. 4 One mark each for each of two reasons identified and one
mark for each of two explanations.
Logical explanation which might include:
 higher demand (1) due to e.g. increase in income / Do not award for decreased costs or increased profits.
successful advertising / change in taste / fashion (1)
 change in price of the product (1) if demand is inelastic
(1) a rise in price will cause a rise in revenue (1) / if
demand is elastic (1) a fall in price will cause a rise in
revenue (1)
 increased market power / market share / monopoly (1)
 price of substitutes increased / fewer substitutes
available (1) demand shifted to this product (1)
 price of complements decreased (1) raising demand for
the complement (1)
 higher incomes of consumers (1) increasing affordability
to buy the product (1)
 firm selling higher quality product (1) more consumers
want to buy the product (1)
 government subsidy received (1) extra source of
revenue (1).

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Question Answer Mark Guidance

3(c) Analyse two economic consequences of having a large 6

proportion of the population aged under 16.

Coherent analysis which might include:

 requirement for substantial spending on education (1)
opportunity cost for other spending (1) e.g. healthcare /
infrastructure / any examples of other spending (1) high
demand for teachers (1)
 high dependency ratio (1) few income earners and
many dependents (1) reduced tax revenues (1) lower
living standards (1) income has to be shared between
many people (1)
 low levels of economic activity (1) young population not
in the labour force / not working (1) lack of experienced
workers (1) less productivity (1) smaller GDP / lower
economic growth (1)
 greater demand for items consumed by children e.g.
toys (1) smaller demand for items consumed by adults
e.g. cars (1)
 future economic growth potential high (1) when young
reach adulthood they enter the labour force (1)
increasing the supply of labour (1) lowering labour costs
(1) encouraging investments (1).

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Question Answer Mark Guidance

3(d) Discuss whether or not it would benefit the economy if a 8

Level Description Marks
government imposed regulations on video game use by
young people. 3 A reasoned discussion which 6–8
accurately examines both sides of the
In assessing each answer, use the table opposite. economic argument, making use of
economic information and clear and
Why it might: logical analysis to evaluate economic
 government can ban a product or limit the quantity issues and situations. One side of the
allowed to be bought, decreasing demand for the argument may have more depth than
product the other, but overall both sides of the
 government can impose age limits on certain products argument are considered and
 government can ensure the product produced doesn’t developed. There is thoughtful
create too many external costs e.g. violent crime evaluation of economic concepts,
 improve educational achievement, skills of worker, terminology, information and/or data
higher output appropriate to the question. The
 improve health, reduce healthcare costs discussion may also point out the
 reduce consumption of a demerit good i.e. violent video possible uncertainties of alternative
games. decisions and outcomes.

Why it might not: 2 A reasoned discussion which makes 3–5

 policing might not be effective use of economic information and clear
 unofficial / illegal markets could be formed, government analysis to evaluate economic issues
spending required to police them and situations. The answer may lack
 opportunity cost, spending on e.g. healthcare instead of some depth and development may be
policing one-sided. There is relevant use of
 could increase unemployment in the video gaming economic concepts, terminology,
industry information and data appropriate to
 could reduce GDP / economic growth if the industry is the question.
significant
 could reduce tax revenue if games are subject to tax 1 There is a simple attempt at using 1–2
economic definitions and terminology.
 video games can be creative, giving participants skills
Some reference may be made to
 could reduce exports and worsen the current account
economic theory, with occasional
balance.
understanding.

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Question Answer Mark Guidance

3(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Mark Guidance

4(a) Define a trade in goods deficit. 2

Expenditure on imports (of goods) exceeds revenue from

exports (of goods) (2).
Imports exceed exports (1).

4(b) Explain two ways firms can be classified. 4 One mark each for each of two ways identified and one
mark for each of two explanations.
Logical explanation which might include:

By stage (1): primary / secondary / tertiary (1) according to

the product produced (1).
By sector (1) private sector / public sector (1) according to
who owns the firm (1).
By size (1) according to amount of output produced /
number of workers employed (1).
By location (1) MNC or domestically-based (1) according to
whether operates in more than one country (1).
By level of competition (1) may be a monopoly or
competitive firm (1).
By use of factors of production (1) capital intensive or labour
intensive (1).

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Question Answer Mark Guidance

4(c) Analyse why a government may protect its country’s 6

industries from foreign competition.

Coherent analysis which might include:

To improve / stop decline of the balance of payments (1) by
increasing exports / reducing imports (1) increasing
economic growth (1).
To protect infant (sunrise) industries (1) allow growth in
order to take advantage of economies of scale (1) charge
lower prices (1).
To protect declining (sunset) industries (1) allow industries
to decline gradually (1) unable to replace workers leaving /
retiring (1) to protect jobs / avoid rising unemployment (1).
To protect strategic industries (1) to ensure supply of e.g.
food (1) not disrupted by e.g. economic sanctions (1).
To protect industries from unfair competition (1) e.g.
dumping (1) government subsidies (1).

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Question Answer Mark Guidance

4(d) Discuss whether or not a government should increase 8

Level Description Marks
its spending on healthcare.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it should: economic information and clear and
 to prevent illness / the spread of diseases / reduce logical analysis to evaluate economic
death rates issues and situations. One side of the
 may improve productivity argument may have more depth than
 healthcare may be under-consumed the other, but overall both sides of the
 healthcare is a merit good argument are considered and
 the poor may not be able to afford healthcare developed. There is thoughtful
 may increase life expectancy evaluation of economic concepts,
 may increase employment in healthcare terminology, information and/or data
 may boost total (aggregate) demand / economic growth appropriate to the question. The
 may reduce unemployment discussion may also point out the
 may increase government tax revenues. possible uncertainties of alternative
decisions and outcomes.
Why it should not:
 increased cost of healthcare may cause a budget deficit 2 A reasoned discussion which makes 3–5
 may have to raise taxes use of economic information and clear
 increased spending may cause inflation analysis to evaluate economic issues
and situations. The answer may lack
 opportunity cost e.g. spending on education
some depth and development may be
 private sector provision may be more efficient
one-sided. There is relevant use of
 doesn't guarantee higher quality healthcare. economic concepts, terminology,
information and data appropriate to
the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Mark Guidance

4(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Question Answer Mark Guidance

5(a) Identify two benefits of a horizontal merger. 2 Higher revenue not accepted.
 economies of scale / lower costs
 lower prices (for consumers)
 sharing of each firm's strengths
 more capital available
 market power / higher prices
 higher quality
 more efficient use of resources
 higher profit
 international competitiveness

5(b) Explain two possible external benefits of vaccines. 4

Logical explanation which might include:

 healthier overall population (1) reduced risk for others to

become infected / for those who have been vaccinated
to spread the disease to the rest of the population (1)
 improved HDI (1) life expectancy is part of a country's
HDI (1)
 reduced long term spending on healthcare (1) freeing
funds for other areas (1)
 healthier labour force (1) higher productivity / higher
output / lower prices (1)
 more jobs to the community near the vaccine production
site (1) higher incomes / lower unemployment (1)
 increased medical research and development/
innovation (1) helps other fields in medicine and science
(1).

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Question Answer Mark Guidance

5(c) Analyse potential reasons why a merged firm may fail. 6

Coherent analysis which might include:

 diseconomies of scale (1) higher long run (average)
cost as output increases (1) decreasing profits (1)
 lack of coordination (1) difficult to coordinate between
the different departments in a larger company (1) may
require additional managers / processes (1)
 lack of control (1) difficult to ensure everyone in a large
company is working towards the same goal (1)
increased absences / slacking-off (1)
 lack of cooperation / disagreements (1) no sense of
belonging and personal connections (1) and therefore
workers may not want to work with each other (1)
 lack of synergy (1) different parts of the merged
companies can’t work well with each other (1) don’t
have the same philosophy / management styles (1)
 reduced competition may increase complacency /
reduce efficiency / innovation (1) lower quality (1)
reduce demand (1)
 other possible reasons for failure, not directly related to
merger, e.g. fall in demand (1) supply chain difficulties
(1).

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Question Answer Mark Guidance

5(d) Discuss whether or not investment is beneficial to an 8

Level Description Marks
economy.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
 improves productivity / technological innovation logical analysis to evaluate economic
 creates jobs – decreasing unemployment issues and situations. One side of the
 consumers may benefit if investment reduces prices, argument may have more depth than
improves quality of products the other, but overall both sided of the
 increases total demand and output of the economy – argument are considered and
economic growth developed. There is thoughtful
 improves quality of education evaluation of economic concepts,
 improves quality of health terminology, information and/or data
 if FDI, it provides funds not available in home country. appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of alternative
 if financed by borrowing, affected by interest rate decisions and outcomes.
changes
 creates inflation in short run 2 A reasoned discussion which makes 3–5
 increases pollution – external cost use of economic information and clear
 if foreign investment – overdependence on foreign analysis to evaluate economic issues
parties and situations. The answer may lack
 increased inequality some depth and development may be
 increased unemployment if capital goods act as a one-sided. There is relevant use of
substitute for labour economic concepts, terminology,
information and data appropriate to
 opportunity cost in the form of fewer consumer goods in
the question.
the short run.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

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Question Answer Mark Guidance

5(d)
Level Description Marks

0 A mark of zero should be awarded for 0

no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/21
Paper 2 Structured Questions October/November 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 24 printed pages.

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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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an MAX

illogical line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made

without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

Nothing creditworthy
L
O

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate the total number of people in Cambridge aged 18– 1

29 in 2019.

37 440 (1)

1(b) Identify two types of industries in Cambridge that operate in 2 If more than two types are given, consider the first three.
the tertiary sector.

Education (1).
Healthcare (1).
Research and development (1).

1(c) Identify two benefits of having highly knowledge-intensive 2 If more than two benefits are given, consider the first
exports. three.

Exports highly priced (1). Accept high value for highly priced.
Price inelastic in demand (1).
Increased demand for exports (due to increased global incomes)
(1).

1(d) Explain how having a more educated labour force can 4

reduce poverty.

Logical explanation which might include:

a more educated labour force will be more skilled / more

productive (1) enabling them to earn higher wages (1) able to
afford basic necessities (1).

a more educated labour force may have more job opportunities /

less unemployment (1) wages may be higher than
unemployment benefits (1).

a more educated labour force has access to more information on

health (1) increasing the ability to work (1) have access to better
healthcare (1).

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Question Answer Marks Guidance

1(e) Draw a demand and supply diagram to show the effects of 4

increased global income on the market for education in
Cambridge.

D&S diagram:

Axes correctly labelled – price and quantity or p and q (1).

Original demand and supply curves correctly labelled (1).
New curve shifted to the right (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

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Question Answer Marks Guidance

1(f) Analyse the relationship between the percentage of 5 Responses do not have to be in the format suggested
population with a university degree and GDP per head. but they should address the expected / normal
relationship, offer supporting evidence of that, highlight
Coherent analysis which might include: any exceptions to that, and analyse the overall data.

Expected relationship:
Positive / direct relationship (1) the higher percentage of
population with a university degree, the higher the GDP per
head (1).

Analysis of expected relationship: as percentage of population

with a university degree increases, the more skills / qualification
they will have (1) therefore, they have higher productivity and
can earn more (1).

Supporting evidence: e.g. Indonesia lowest percentage of

population with a university degree, lowest GDP per head ;
Canada, Switzerland and UK have the highest three in each
category; Colombia has the second lowest percentage of
population with a university degree and the second lowest GDP
per head (2).

Exception: Switzerland (1) has lower percentage of population

with a university degree than Canada or the UK, but higher GDP
per head (1).

Analysis of the exception:

Other influences, e.g. quality of secondary education, proportion
of the population employed in banking (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not free trade is beneficial for a city 6 Apply this example to all questions with the
such as Cambridge. command word DISCUSS
(1g, 1h, 2d, 3d, 4d and 5d)
Award up to 4 marks for logical reasons why it might, which may
include: Each point may be credited only once, on either side of
an argument, but separate development as to how / why
• easier to export (1) increased export revenues (1) increased the outcome may differ is rewarded.
revenue / profits for producers (1) higher growth in the city
(1). Generic example mark
• easier to import / more imports (1) cheaper imports of goods
and materials / lower costs for firms (1) lower prices (of Tax revenue may decrease… 1
exports) (1).
• more jobs created (1) reducing the level of unemployment ...because of reason e.g. incomes may be 1
(1). lower.
• increase size of the market (1) economies of scale (1) e.g.
purchasing / technical / marketing / managerial / financial Tax revenue may increase because 0
(1). incomes may be higher i.e. reverse of a
• increased choice for consumers (1) from increased imports previous argument.
(1) higher quality goods / variety of goods (1).
• more competition (1) or more transfer of ideas and Tax revenue may increase because of a 1
knowledge (1) leads to more innovation (1) lower prices (1) different reason i.e. not the reverse of a
• encourage entrepreneurship / investment (1) profit incentive previous argument e.g. government
(1) spending on subsidies may stimulate the
economy more than spending on
education.

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Question Answer Marks Guidance

1(g) Award up to 4 marks for logical reasons why it might not, which
may include:

• overdependence on foreign markets (1) economic shocks in

other countries can negatively affect revenues of firms (1)
reduce economic growth and development in the city (1).
• free trade could reduce competitiveness of firms (1) other
economies might have relatively lower costs (1) cheap
imports / more imports (1) stop development of infant
industries (1) may lead to job losses in the city (1).
• free trade only affects certain producers / firms / workers (1)
leads to increased inequality / uneven distribution of income
(1).
• free trade leads to more environmental degradation (1) due
to more production / more need for cross-border transport
(1) creating external costs / negative externalities (1).
• may increase consumption of demerit goods (1) reduce
health (1).
• free trade could lead to the creation of global monopolies
(1). reducing the ability of smaller domestic firms to compete
(1).

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Question Answer Marks Guidance

1(h) Discuss whether or not firms in Cambridge will continue to 6

grow.

Award up to 4 marks for logical reasons why it might, which may

include:

• ease of access to a large amount of highly-skilled and

educated workers, from all over the world (1) easy to find
workers (1) to produce goods and services (1) or lower cost
of labour (1)
• skilled workers are more productive (1) more innovation /
new ideas / high quality products (1)
• young workers (1) may be up-to-date with modern
technology (1)
• good infrastructure (1) such as access to ultra-fast
broadband (1) productivity is higher (1) faster production /
less delays (1)
• good transport links to other cities and international airports
(1) easy to export / high demand for their exports (1) easy to
reach customers (1) faster deliveries (1) increased demand
for goods and services (1).

Award up to 4 marks for logical reasons why it might not, which

may include:

• high land and office costs (1) high cost of production (1)
higher capital start-up costs (1) lower profits (1)
• high house prices (1) poor air quality (1) may discourage
workers from locating in Cambridge (1) difficult for firms to
find workers (1)
• small population (1) small market (1) limited demand (1)
limited scope for revenue / profits for Cambridge firms (1)
• overdependence on one sector (e.g. education) (1) limits
potential growth from other sectors (1)
• skilled workers are available in other cities (1).

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Question Answer Marks Guidance

2(a) State how average revenue is calculated. 2 Accept quantity without ‘sold’ as the divisor.

Average revenue = total revenue (1) / quantity sold (1)

2(b) Explain two advantages of a large firm. 4 One mark each for each of two advantages identified
and one mark each for each of two explanations.
Logical explanation which might include: Accept explanation of two different economies of scale.
economies of scale (1) (average) cost lower than smaller firms Credit another example of economies of scale e.g.
(1) financial economies.
finance / capital available (1) ease of getting loans from banks
(1)
technological development (1) high productivity (1)
large customer base (1) high revenue / profits (1)
may be well-known (1) increase brand loyalty (1).

2(c) Analyse the possible causes of higher prices of a product 6 Accept any relevant example of a fall in the price of a
such as ski holidays in the Alps. complement e.g. ski equipment, as a reason for higher
demand.
Coherent analysis which might include:

• higher demand / higher popularity (1) from e.g.

advertisements / reputation (1) rise in quality (1) rise in price
of a substitute / another type of holiday (1)
• more inelastic demand (1) quantity demanded less
responsive to changes in price (1) e.g, due to higher brand
loyalty (1)
• higher income of target market (1) luxury good (1)
• lower supply (1) e.g. due to better quality (1)
• more inelastic supply (1) quantity supplied less responsive
to changes in price (1) more regulations (1)
• higher cost of production (1) higher labour costs (1) higher
minimum wage (1) higher living costs of workers in ski
industry (1)
• investment in improving facilities e.g. ski lifts (1) may raise
costs in the short run (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not government intervention is 8

beneficial for firms. Level Description Marks

3 A reasoned discussion which 6–8

In assessing each answer, use the table opposite.
accurately examines both sides of the
economic argument, making use of
Why it might:
economic information and clear and
logical analysis to evaluate economic
• government could provide subsidies to reduce firms' costs /
issues and situations. One side of the
help boost output / help during natural disasters / help firms
argument may have more depth than
survive
the other, but overall both sides of the
• government could reduce taxes to reduce cost of production argument are considered and
• minimum prices could increase revenues of firms developed. There is thoughtful
• government spending on education could increase skills of evaluation of economic concepts,
workers terminology, information and / or data
• government spending on benefits could increase demand appropriate to the question. The
for products discussion may also point out the
• regulations controlling monopolies could promote possible uncertainties of alternative
competition. decisions and outcomes.

Why it might not: 2 A reasoned discussion which makes 3–5

use of economic information and clear
• government regulations could increase cost of production analysis to evaluate economic issues
• minimum wage could add to firms' costs, reducing profits and situations. The answer may lack
• indirect taxes or direct taxes could reduce firms’ profits some depth and development may be
• maximum prices could reduce firms’ revenues one-sided. There is relevant use of
• trade restrictions could limit competition. economic concepts, terminology,
information and data appropriate to the
question.

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Question Answer Marks Guidance

2(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

Question Answer Marks Guidance

3(a) Identify two types of tax. 2 Accept any relevant examples of taxes e.g. income tax,
tariffs. Accept, but do not expect, specific and ad
Direct (1) Indirect (1) valorem taxes.
Progressive (1) Proportional (1) Regressive (1)

3(b) Explain two functions of money. 4 One mark each for each of two functions identified and
one mark each for each of two explanations.
Logical explanation which might include:
• a medium of exchange (1) to buy goods and services / to
trade (1)
• a measure of value / unit of account (1) to measure how
much a product is worth (1)
• a store of value (1) to allow people to save (1)
• a method of deferred payment (1) for borrowing and
lending (1).

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Question Answer Marks Guidance

3(c) Analyse the consequences of market failure. 6 i.e. labour market failure.

Coherent analysis which might include:

• market failure exists when the production or consumption of

goods and services in a market is not efficient (1)
• overconsumption of demerit goods (1) and goods with
external costs (1) leading to an overall misallocation of
resources (1) e.g. overconsumption of cigarettes, fossil fuels
(1)
• underconsumption of merit goods (1) and goods with
external benefits (1) e.g. education, healthcare (1)
• non-supply (1) of public goods (1) e.g. defence (1)
• abuse of monopoly power (1) resulting in higher prices (1)
reducing affordability / choice (1)
• factor immobility (1) resulting in shortages and surpluses (1)
causing unemployment (1) resulting in lower income /
poverty (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a tax on a product can reduce 8

external costs. Level Description Marks

3 A reasoned discussion which 6–8

In assessing each answer, use the table opposite.
accurately examines both sides of the
economic argument, making use of
Why it might:
economic information and clear and
logical analysis to evaluate economic
• tax will increase price, reducing the quantity demanded
issues and situations. One side of the
• if demand for the product is elastic, quantity demanded will argument may have more depth than
be responsive to the price increase, quantity demanded will the other, but overall both sides of the
change significantly argument are considered and
• tax will increase the cost of production, therefore decreasing developed. There is thoughtful
supply evaluation of economic concepts,
• tax will decrease the profits of firms terminology, information and / or data
• tax will provide governments additional revenue to help with appropriate to the question. The
subsidising less-polluting products. discussion may also point out the
possible uncertainties of alternative
Why it might not: decisions and outcomes.

• tax is insignificant compared to the final price of the product 2 A reasoned discussion which makes 3–5
• tax avoidance / evasion / unofficial or illegal markets use of economic information and clear
• if demand for the product is inelastic, quantity demanded analysis to evaluate economic issues
will be unresponsive to the price increase, quantity and situations. The answer may lack
demanded will not change significantly, e.g. addictive some depth and development may be
products. one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to the
question.

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Question Answer Marks Guidance

3(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

Question Answer Marks Guidance

4(a) Identify, other than natural rubber, two primary-sector 2 If more than two products are given, consider the first
products. three.
Accept process rather than product e.g. fishing.
e.g. coal, oil, fish, wood, wheat

4(b) Explain two reasons why a country may change its 4 One mark each for each of two reasons identified and
specialisation. one mark each for each of two explanations.

Logical explanation which might include:

• Change in quantity / quality of resources (1) discovery of
new resources (1) or new technology (1) other
economies may be more / less efficient in production of
certain products (1).
• Change in cost of production (1) change in labour costs
(1) e.g. increase in minimum wage (1) change in capital
costs (1) e.g. cheaper technology (1)
• Changes in demand (1) changes in consumer behaviour
(1) change in revenue / profits (1)
• Changes in level of competition (1) other countries’
producers may gain a competitive advantage (1).

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Question Answer Marks Guidance

4(c) Analyse the economic benefits for a country in producing 6

manufactured goods instead of primary sector products.

Coherent analysis which might include:

• higher price (1) higher output (1) higher revenues / profits

(1) higher value added (1)
• more exports (1) increased total demand (1) economic
growth (1)
• higher productivity (1) economies of scale (1)
• more demand for workers (1) lower unemployment (1) may
be more skilled jobs (1) higher income of workers (1) higher
standards of living / reduction in poverty (1)
• does not require stock of natural resources (1) skills /
technology could be learnt / imported (1)
• less dependent on weather changes (1) more stable
revenues / income (1) easier to plan / budget (1)
• higher tax revenues for the government (1) higher
government spending (1) more development spending e.g.
healthcare services / education services / infrastructure (1)
resulting in higher levels of economic development (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not labour-intensive production will 8

harm an economy. Level Description Marks

3 A reasoned discussion which 6–8

In assessing each answer, use the table opposite.
accurately examines both sides of the
economic argument, making use of
Why it might:
economic information and clear and
logical analysis to evaluate economic
• labour may cost more than capital
issues and situations. One side of the
• labour may be more unreliable – inefficient / inconsistent. argument may have more depth than
• labour may be protected by trade unions – more disruptions the other, but overall both sides of the
• labour may be less productive argument are considered and
• labour may need more breaks than machines developed. There is thoughtful
• labour intensive production may be less cost-effective, evaluation of economic concepts,
reducing international competitiveness. terminology, information and / or data
appropriate to the question. The
Why it might not: discussion may also point out the
possible uncertainties of alternative
• provides high employment levels – high standards of living decisions and outcomes.
• lower levels of unemployment – less government spending
on unemployment benefits 2 A reasoned discussion which makes 3–5
• labour may be more flexible than machines – can change use of economic information and clear
skills / production / more mobile analysis to evaluate economic issues
• labour may be able to respond to people / customers more and situations. The answer may lack
easily. some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

4(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

5(a) Identify two monetary policy measures. 2 Accept, but do not expect, quantitative easing as an
alternative to money supply. If more than two measures
Changes in: interest rates (1) money supply (1) foreign are given, consider the first three.
exchange rates (1).

5(b) Explain two microeconomic policy measures that can be 4 Examples could be related to any market – does not
taken by a government to reduce the price of a product. have to be housing market.

Logical explanation which might include: If more than two policy measures are given, consider
the first three.
• maximum prices (1) e.g. maximum rents / rent controls
(1)
• subsidies (1) reduce cost of production (1) e.g. housing
subsidies (1)
• nationalisation (1) government sets lower prices (1)
• direct provision of goods (1) increase supply of goods (1)
e.g. government providing public housing (1)
• regulation (1) e.g. prohibiting foreign house buying (1)
reduce demand (1)
• deregulation (1) allowing more firms in the market / more
competition (1)
• lower (sales) taxes (1) if sellers reduce prices as a result
(1).

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Question Answer Marks Guidance

5(c) Analyse the key determinants of price elasticity of supply of 6 Also accept an approach based on why PES may be
a product. inelastic as shown in third bullet point.

Coherent analysis which might include:

• availability of stocks (1) finished goods which are unsold (1)

with a high level of stocks, supply will be elastic (1)
• level of spare capacity (1) factors of production available but
unused (1) e.g. workers not working full time (1) supply will
be more elastic if levels of spare capacity are high (1)
• time period under consideration (1) short run / long run (1)
short run has inelastic supply (1) with at least one fixed
factor of production (1) which makes it more difficult to
produce (1) long run has elastic supply (1) when all factors
of production are variable (1) making it easier to produce
more (1)
• difficulty of production process / length of production time
(1) produce that is easy to produce will be more elastic (1)
e.g. bread is easier to produce compared to a smartphone
(1).

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Question Answer Marks Guidance

5(d) Discuss whether or not trade unions benefit workers. 8

Level Description Marks
In assessing each answer, use the table opposite.
3 A reasoned discussion which 6–8
accurately examines both sides of the
Why they might:
economic argument, making use of
economic information and clear and
• collective bargaining can result in higher wages
logical analysis to evaluate economic
• better working hours and working conditions can be issues and situations. One side of the
negotiated argument may have more depth than
• trade unions may protect employment giving more job the other, but overall both sided of the
security argument are considered and
• trade unions may influence governments to give favourable developed. There is thoughtful
policies for workers, e.g. maternity pay evaluation of economic concepts,
• trade unions may provide services for workers e.g. training. terminology, information and / or data
appropriate to the question. The
Why they might not: discussion may also point out the
possible uncertainties of alternative
• higher wages negotiated by trade unions may increase decisions and outcomes.
costs of production, firms may reduce number of workers to
cut costs 2 A reasoned discussion which makes 3–5
• may promote industrial actions / strikes, reducing use of economic information and clear
productivity, reducing wages of workers analysis to evaluate economic issues
• may reduce competitiveness of the economy, reducing and situations. The answer may lack
investment and therefore reducing the demand for workers. some depth and development may be
• workers may not agree with the objectives of a trade union one-sided. There is relevant use of
• workers may feel that the fees to join a trade union are too economic concepts, terminology,
high compared to the benefits they could receive from information and data appropriate to the
membership. question.

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Question Answer Marks Guidance

5(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions October/November 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 23 printed pages.

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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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an MAX

illogical line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

Nothing creditworthy
L
O

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate what percentage of Honduran people did not 1 Accept 8.0 or 8.3.
have access to electricity in 2020.

8.3%.

1(b) Identify two benefits the Honduran economy could gain 2 If more than two benefits are given, consider the first three.
from a growth in the US economy.
Accept increase trade for more exports.
Sell more exports to the US (1).
Receive more money from Honduran workers in the US (1). Accept increase employment / lower unemployment for
More job opportunities for Honduran workers in the US (1). more job opportunities.

1(c) Explain one advantage of an economy specialising. 2 One mark for an advantage identified and one mark an
explanation.
Gain skills (1) raise productivity / raise efficiency / ‘practice Identification mark must come directly from the source
makes perfect’ / lower costs of production / raise quality / material.
increase output / supply / less waste (1). A relevant explanation mark can be given even in the
Gain a good reputation (1) increase demand (1). absence of an identification.

1(d) Explain two ways a government could redistribute 4 One mark each for each of two ways identified and one
income. mark each for each of two explanations.

Logical explanation which might include: If more than two reasons given, consider the first three.
Provision of unemployment benefit / state benefit / welfare
benefit / benefits (1) raise income of those on low or no One mark for taxing the rich and giving to the poor.
income / enable the unemployed to buy basic necessities /
reduce absolute poverty (1).
Progressive income tax system (1) takes a higher proportion
of the income of the rich / use some of tax revenue raised to
increase spending to help those on low incomes (1).

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Question Answer Marks Guidance

1(e) Draw a demand and supply diagram to show how a 4

report stating that bananas are good for health would
affect the market for bananas.

Coherent analysis which might include:

Demand and supply diagram:

Axes correctly labelled – price and quantity or p and q (1).
Original demand and supply curves correctly labelled (1).
Demand curve shifted to the right (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

If a candidate draws two diagrams, they may be able to get

3 marks:
1 mark for axes
1 mark for D & S labelled correctly
1 mark for the demand curve shifted to the right.
They would not get the mark for the equilibriums as the two
diagrams are likely to conflict on this.

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Question Answer Marks Guidance

1(f) Analyse the relationship between the percentage of 5 Responses do not have to be in the format suggested but
population living in poverty and life expectancy. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.

Expected relationship:
Inverse / negative (1) the higher the level of poverty, the
lower the life expectancy / the lower the level of poverty, the
higher the life expectancy (1).

Supporting evidence:
Sweden has the lowest % of population living in poverty and
the highest life expectancy / The country / two countries /
three countries / four countries with the lowest levels of
poverty head had the longest life expectancy (1) the two
countries, Chad and South Sudan, with the highest level of
poverty had the lowest life expectancy (1).

Analysis of expected relationship:

A high level of poverty is likely to mean poor healthcare (1)
low nutrition / poor housing / poor sanitation / low levels of
education (1).

Exception:
Chad / South Sudan (1) Chad had a lower level of poverty
but also a lower level of life expectancy than South Sudan
(1)

Analysis of exception:
Life expectancy is determined by other influences e.g. wars
(1).

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Question Answer Marks Guidance

1(g) Discuss whether or not the cost of producing clothes in 6 Allow higher productivity / efficiency once either in
Honduras will fall in the future. connection with labour or capital.
Some points may be given in reverse e.g. price of raw
Award up to 4 marks for logical reasons why it might, which materials may fall.
may include: Not accepting subsidising the clothes industry as the source
• more training (1) better working conditions (1) may material indicates that it is a successful industry.
increase labour productivity / efficiency / skills (1)
reduce labour costs (1) Apply this example to all questions with the command
• more use of capital goods (1) may reduce disruption to word DISCUSS
production / make fewer mistakes / less waste (1) speed (1(g), 1(h), 2(d), 3(d), 4(d) and 5(d))
up production / increase productivity / efficiency (1)
• improved working conditions (1) may reduce industrial Each point may be credited only once, on either side of an
action (1) more motivation (1) argument, but separate development as to how/why the
• successful clothes industry so firms may grow in size (1) outcome may differ is rewarded.
more able to take advantage of economies of scale (1).
Generic example Mark
Award up to 4 marks for logical reasons why it might not,
which may include: Tax revenue may decrease… 1
• price of raw materials may rise (1) may be subject to
bad weather (1) exchange rate may fall / tariffs may be ...because of reason e.g. incomes 1
imposed on imported raw materials (1) reduce supply may be lower.
(1) country has experience of inflation (1)
• unemployment may fall (1) making it more difficult for Tax revenue may increase 0
the clothes industry to recruit labour (1) strengthening because incomes may be higher
the bargaining power of workers (1) raising wages / i.e. reverse of a previous
increasing labour costs (1) argument.
• providing training (1) and better working conditions will
involve a cost (1) Tax revenue may increase 1
• more use of capital goods may involve initial high because of a different reason i.e.
spending on equipment (1) firms may experience not the reverse of a previous
diseconomies of scale (1) argument e.g. government
• higher indirect tax / tax may be imposed (on clothes / spending on subsidies may
clothes firms) (1). stimulate the economy more than
spending on education.

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Question Answer Marks Guidance

1(h) Discuss whether or not a fall in unemployment in 6

Honduras is likely to cause inflation.

Award up to 4 marks for logical reasons why it might, which

may include:
• unemployment is already low (1) may move towards full
employment (1) may push up wages (1) increase
(average) costs (1) cause cost-push inflation / total
supply less than total demand (1)
• lower unemployment may increase incomes (1) causing
a rise in consumer spending / purchasing power (1)
increasing total demand (1) causing demand-pull
inflation / total demand higher than total supply (1).
• inflation already exists (1) which may lead workers to
expect it to continue (1) increasing wage claims (1).

Award up to 4 marks for logical reasons why it might not,

which may include:
• may be higher investment (1) could increase total
supply / total supply may rise in line with total demand
(1) reducing cost-push inflation (1)
• lower unemployment could reduce spending on
unemployment benefit (1) increase tax revenue (1)
reduce the budget deficit (1) reduce the growth in total
demand (1) some of higher tax revenue could be spent
on supply-side policy / unemployment may have fallen
due to supply-side policy (1)
• the extra income may be saved / spent on imports (1)
due to uncertainty about the future (1)
• A fall in unemployment does not necessarily mean a
rise in employment (1) the unemployed could have e.g.
retired / emigrated (1).

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Question Answer Marks Guidance

2(a) Define, with an example, a capital good. 2 If more than two examples are given, consider the first two.

A good used to produce another good or service / a human-

made good used for production (1) e.g. a machine (1).

2(b) Explain two reasons why a low inflation rate may 4 One mark each for each of two reasons identified and one
increase a country’s economic growth rate. mark each for each of two explanations.

Logical explanation which might include:

• make the country’s products internationally

competitive (1) sell more exports / buy fewer imports
(1)
• create greater certainty (1) encourage investment /
attract MNCs (1)
• keep increase in costs low (1) may reduce claims for
higher wages/ higher profits (1)
• increase confidence (1) may increase demand /
increase profits 1).

2(c) Analyse how a government could reduce protectionism 6 Allow deregulation as an alternative to remove quotas or
and move towards free international trade. embargoes.

Coherent analysis which might include: Reward removing / reducing bureaucracy, voluntary export
restraints.
• remove tariffs (1) reduce price of imports (1) if firms
have lower costs of production, they will be able to Reward but do not expect reference to exchange control.
compete (1)
• remove quotas / increase quota (limit) (1) remove
bans / embargoes (1) increase quantity of imports /
reduce limits on imports (1)
• remove subsidies (1) firms’ products will not be
artificially cheap (1)
• other countries may remove their protectionism (1)
enabling exports to be sold without restrictions (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not a country will benefit from 8 Reward but do not expect reference to social welfare will be
diamond mining. increased if social benefit exceeds social cost.

In assessing each answer, use the table opposite.

Leve Description Mark
l s
Why it might:
• high global demand 3 A reasoned discussion which 6–8
• can improve the current account of the balance of accurately examines both sides of
payments the economic argument, making
• create employment, both skilled and unskilled jobs use of economic information and
• increase output / economic growth clear and logical analysis to
• may increase tax revenue. evaluate economic issues and
situations. One side of the
Why it might not: argument may have more depth
• demand will fall in a recession than the other, but overall, both
• price may fluctuate sides of the argument are
• may be competition considered and developed. There
• can be accidents is thoughtful evaluation of
• can create external costs e.g. pollution economic concepts, terminology,
• if mined by an MNC, profit may be sent to the home information and/or data appropriate
country to the question. The discussion
• supply may be depleted may also point out the possible
• price may increase in the future so better to conserve uncertainties of alternative
diamonds now decisions and outcomes.
• may not be a large proportion of GDP.
2 A reasoned discussion which 3–5
makes use of economic information
and clear analysis to evaluate
economic issues and situations.
The answer may lack some depth
and development may be one-
sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

2(d)
1 There is a simple attempt at using 1–2
economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

Question Answer Marks Guidance

3(a) Define, with an example, a fixed cost. 2 Not sufficient to state a cost that does not change.

A cost that does not change with output / a cost that has to Accepting electricity / electricity bills and wages.
be paid even when output is zero (1) e.g. rent (1).

3(b) Explain two types of unemployment. 4 Allow explanation of two types of frictional unemployment
i.e. search, casual or seasonal and two types of structural
Logical explanation which might include: unemployment i.e. regional and technological. Also allow
• frictional unemployment (1) workers in between jobs voluntary and involuntary.
(1)
• structural unemployment (1) changes in demand and One mark each for each of two types identified and one
supply conditions / skills not matching vacancies / mark each for each of two explanations.
lack of labour mobility (1)
• cyclical / demand-deficient unemployment (1) lack of
total demand / occurs during a recession (1)

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Question Answer Marks Guidance

3(c) Analyse how supply-side policy measures could reduce 6 Reward the same point e.g. ‘raise productivity’ only once.
unemployment.
Coherent analysis which might include: Accept lower interest rate if linked to encouraging
investment.
Education (1) can increase qualifications / literacy rate (1)
training (1) can increase skills / productivity / quality of
labour (1) raise mobility / increase job opportunities (1)
reduce structural unemployment (1).
Lower income tax (1) reduce unemployment benefit (1)
increases the incentive for the unemployed to find work
quickly (1) reduce frictional unemployment (1).
Lower corporation tax / tax incentives (1) encourage firms to
invest / expand output (1).
Privatisation (1) deregulation (1) can increase efficiency (1)
reduce firms’ costs (1) enabling firms to afford more workers
(1).
Reform of trade unions / labour market reforms (1)
Deregulation / removing labour regulations (1) making it
easier to hire and fire workers (1).
Government spending on infrastructure (1) can reduce firms’
costs of production / reduce transport costs (1) encouraging
firms to expand (1) increase labour mobility (1).
Minimum wage legislation (1) reducing may encourage
employer to employ more workers / increasing may
encourage the unemployed to search more actively for work
(1).
Subsidies (1) encouraging firms to expand / prevent firms
going out of business (1).
Better/more healthcare (1) can increase productivity / reduce
working time lost (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not having fewer firms in a market 8

will benefit consumers.
Level Description Marks
In assessing each answer, use the table opposite. 3 A reasoned discussion which 6–8
accurately examines both sides of
Why it might: the economic argument, making
• firms may be larger, may be able to benefit from use of economic information and
economies of scale clear and logical analysis to
• economies of scale may include e.g. financial, evaluate economic issues and
managerial, technical situations. One side of the
• lower costs may result in lower prices argument may have more depth
• firms may have more market power - firms may make than the other, but overall, both
more profit and may reinvest which can improve quality sides of the argument are
• firms may have moved to another market in response to considered and developed. There
changes in consumer demand is thoughtful evaluation of
• firms that were creating pollution and other external economic concepts, terminology,
costs may close down information and/or data appropriate
• may reduce the time consumers spend shopping to the question. The discussion
around may also point out the possible
uncertainties of alternative
decisions and outcomes.
Why it might not:
• firms may experience diseconomies of scale 2 A reasoned discussion which 3–5
• diseconomies of scale may include e.g. communication makes use of economic information
problems, control problems and poor industrial relations and clear analysis to evaluate
• less choice economic issues and situations.
• lack of competition / move towards monopoly resulting The answer may lack some depth
in lower quality and higher prices and development may be one-
• lower availability. sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

3(d)
1 There is a simple attempt at using 1–2
economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

Question Answer Marks Guidance

4(a) Define elastic supply. 2

The percentage change in quantity supplied is greater than

the percentage change in price (2).
Change in supply is greater than the change in price / PES >
1 (1).

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Question Answer Marks Guidance

4(b) Explain two reasons why a government may subsidise 4 One mark each for each of two reasons identified and one
food production. mark each for each of two explanations.

Logical explanation which might include:

Increase output (1) overcome a shortage (1).
Reduce price / cost (1) help consumers / reduce poverty /
give access to a basic necessity / make food more
affordable (1).
Increase quality (1) improve nutrition / increase health of
population / raise life expectancy (1).
Increase incomes of farmers / farm workers (1) raise their
living standards of farmers / stop farmers going out of
business (1).
Reduce imports of food / increase exports of food (1)
improve the current account of the balance of payments /
agriculture is a strategic industry / reduce dependency on
other countries for an essential good (1).
Increase employment / reduce unemployment (1) help in
rural areas (1).

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Question Answer Marks Guidance

4(c) Analyse what influences a farmer’s demand for labour. 6

Coherent analysis which might include:

Demand for the food they produce (1) derived demand / a

higher demand for food will encourage farmers to expand
their output / employ more workers (1) more profits earned
(1).
Wage rates (1) the lower the wage rate, the less it will cost
to employ workers (1).
Skills of workers (1) the more skilled workers are, the more
productive they will be (1).
Price of other factors of production / costs of production (1) if
the price of e.g. agricultural drones falls, demand for labour
may fall (1).
Productivity of other factors of production (1) advances in
technology may result in farm workers being replaced by
machinery (1).
Type of farming (1) some farming is more labour-intensive /
capital-intensive (1).
Size of farm (1) large farms likely to employ more (1).
Subsidies (1) subsides may encourage a farmer to expand
output and employ more workers (1).
Seasons (1) demand for labour is likely to be higher during
harvesting (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not people living in cities have a 8 The answer may be from the view of why people living in
higher living standard than those living in rural areas. rural areas may have a higher living standard.

In assessing each answer, use the table opposite.

Level Description Marks
Why they might: 3 A reasoned discussion which 6–8
• may be more job opportunities accurately examines both sides of the
• may be higher incomes economic argument, making use of
• may be more forms of entertainment economic information and clear and
• may be shorter distance to schools and shops logical analysis to evaluate economic
• may be more access to healthcare facilities issues and situations. One side of the
• may be better quality education/ healthcare. argument may have more depth than
the other, but overall, both sides of the
Why they might not: argument are considered and
• may be more traffic congestion developed. There is thoughtful
• may be overcrowding evaluation of economic concepts,
• air and noise pollution levels may be higher terminology, information and/or data
• stress may be high appropriate to the question. The
• higher cost of living in cities. discussion may also point out the
possible uncertainties of alternative
decisions and outcomes.

2 A reasoned discussion which makes 3–5

use of economic information and clear
analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

4(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

Question Answer Marks Guidance

5(a) Identify two benefits of a decrease in a country’s 2

population size.

Two from:
• may be fewer dependents
• less pressure on resources
• less food needed
• move population towards the optimum level / reduce
overpopulation
• reduce overcrowding / more land space
• reduce pollution / less negative externalities
• lower imports
• lower government expenditure (on
healthcare/education)
• less unemployment / less unemployment benefit
• may increase GDP per head.

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Question Answer Marks Guidance

5(b) Explain how a market moves from disequilibrium to 4 One mark for reference to a change in price.
equilibrium.
Maximum of 2 marks for diagrams which show initial
Logical explanation which might include: disequilibrium and change in price which restores
If demand is greater than supply / there is a shortage / equilibrium.
excess demand (1) price will rise (1).
If supply is greater than demand / there is a surplus / excess
supply (1) price will fall (1).
Demand will again equal supply / demand would not initially
have been equal to supply (1).

5(c) Analyse, using a production possibility curve (PPC) 6

diagram, the effect of a decrease in the size of a
country’s labour force on its economy.

Up to 4 marks for the diagram:

Axes correctly labelled with different outputs (1).
Initial curve drawn as a curve/line sloping downward to the
axes (1).
New curve drawn as a curve/line sloping downward to the
axes (1).
Shift to the left indicated by arrow or letters (1).

Up to 2 marks for coherent analysis which might include:

A decrease in the size of the labour force reduces resources
/ factors of production available (1) this lowers productive
capacity / the maximum output that can be produced (1).

Note to gain the marks for the curves, these must be drawn
to the axes.

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Question Answer Marks Guidance

5(d) Discuss whether or not an increase in exports will 8

Level Description Marks
benefit an economy.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
• may increase export revenue, improve the current to evaluate economic issues and
account balance situations. One side of the argument may
• may increase total demand have more depth than the other, but
• may increase investment overall, both sided of the argument are
• may increase output / economic growth considered and developed. There is
• may reduce unemployment thoughtful evaluation of economic
• may increase incomes. concepts, terminology, information and/or
data appropriate to the question. The
Why it might not: discussion may also point out the
• may cause demand-pull inflation possible uncertainties of alternative
• opportunity cost of selling more products on the home decisions and outcomes.
market 2 A reasoned discussion which makes use 3–5
• may lead to shortages on the home market of economic information and clear
• may deplete resources analysis to evaluate economic issues
• may push up the exchange rate, reversing the increase and situations. The answer may lack
in exports in the long run some depth and development may be
• may make the economy more subject to external one-sided. There is relevant use of
shocks. economic concepts, terminology,
information and data appropriate to the
question.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for no 0
creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/23
Paper 2 Structured Questions October/November 2023
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2023 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 27 printed pages.

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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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281 and 2286

Uncertain what the candidate means – an illogical line of thought MAX

Benefit of the doubt Not answered question

Blank page Not established – a statement made

without any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy
O

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate Montenegro’s budget deficit as a percentage 1 Calculation is -$0.6 bn divided by $4.8 bn
of its GDP.
Allow 12.5
12.5%.

1(b) Identify two examples of capital goods in Montenegro. 2 These are the only two capital goods mentioned in the text
but accept answers such as telecommunications equipment
Computers (1) office buildings (1). and aluminium production factories

1(c) Explain one way price elasticity of demand may 2 One mark for the way identified and one mark for an
influence firms’ decision making. explanation.

If demand is price elastic / high (1) firms will know that if they Note: source material only mentions demand for holidays as
raise price, revenue will fall / if they lower price, revenue will being price-elastic.
rise (1).
No mark for identifying price-inelastic but do allow second
mark that price inelastic demand means if they raise price
revenue will rise / if they lower price, revenue will fall.

Do not reward impact on demand or on profits

1(d) Explain two ways the pattern of employment has 4 One mark each for each of two reasons identified and one
changed in Montenegro in recent years. mark each for each of two explanations.

Logical explanation which might include: Note: question requires a reason for the change in pattern
Higher proportion of workers employed in the tourism of employment
industry / tertiary sector (1) growth in tourism / lower
proportion employed in primary and secondary sectors (1).

More workers employed in the private sector / commercial

banks / telecommunications / aluminium products (1) due to
privatisation / less employed in state sector (1).

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Question Answer Marks Guidance

1(e) Draw a demand and supply diagram to show the effect 4

of a minimum price set above the equilibrium price on
the market for oranges.

Coherent analysis:
Demand and supply diagram:
Axes correctly labelled – price and quantity or p and q (1).
Original demand and supply curves correctly labelled (1).
Minimum Price / Price floor line set above the equilibrium
and correctly labelled – accept Pmin or Pm or MP but not
P2.

Supply shown as greater than demand e.g. labelling of

Qd<Qs (1).

Note: No mark for showing minimum price if also shows a

shift in supply or demand curve as it is no longer above
market equilibrium.
Ignore all written comments.

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Question Answer Marks Guidance

1(f) Analyse the relationship between countries’ trade in 5 Allow income for primary income and current transfers for
goods and services balance and their current account secondary income.
balances.
Responses do not have to be in the format suggested but
There are two approaches to answering this question: they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Approach A: Coherent analysis which might include: and analyse the overall data.
Expected relationship: MAX 2 marks.
Do not accept relationship is directly proportional.
Positive / direct relationship (1).

Countries which have a deficit on the trade in goods and

services balance might be expected to have a deficit on the
current account balance (1).
Countries which have a surplus on the trade in goods and
services balance might be expected to have a surplus on the
current account balance (1).

Supporting evidence: MAX 2 Marks

Three countries / Bosnia & Herzegovina / Kosovo /
Montenegro all have a deficit on the trade in goods and
service balance also had a deficit on the current account
balance (1) two countries / Bulgaria / Slovenia had a surplus
on the trade in goods and service balance but also had a
surplus on the current account balance (1).

Exception: Max 2 marks

Croatia (1) had a deficit on trade in goods and services
balance but a surplus on the current account balance (1).

Approach B:
Expected Relationship: Max 2 marks.

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Question Answer Marks Guidance

1(f) There is no expected relationship as the current account

balance contains other items which can either be positive or
negative (1) and are not dependent on the trade in goods
and services (1).

Supporting evidence: Max 2 marks

There are 5 countries where the current account balance is

higher than the trade in goods and services balance (1)
example (1).

Exception: Max 2 marks

Slovenia (1) where current account balance is worse that
trade in goods and services balance / trade in goods and
services is $4.6bn but current account balance is only
$3.0bn (1).

Analysis for both approaches: Max 3 marks

Trade in goods and services is the largest component of the
current account (1) current account also includes primary
income and secondary income (1) Bosnia & Herzegovina,
Bulgaria, Croatia, Kosovo and Montenegro must have had a
surplus on the primary and secondary income (1) Slovenia
must have had a deficit on the primary and secondary
income (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not privatisation is likely to have 6 Apply this example to all questions with the command word
benefited consumers in Montenegro. DISCUSS (1g, 1h, 2d, 3d, 4d and 5d)

Award up to 4 marks for logical reasons why it might, Each point may be credited only once, on either side of an
which may include: argument, but separate development as to how/why the
outcome may differ is rewarded.
• Firms are profit driven (1) may have increased
investment / research & development (1) raising quality Generic Example Marks
of goods and services (1) lowered cost of production (1)
• more firms entering the market (1) increased Tax revenue may decrease… 1
competition (1) may reduce prices (1) may give more
choice to consumers (1) ...because of reason e.g. incomes 1
• firms may respond more quickly (1) to changes in may be lower.
consumer demand (1).
Tax revenue may increase 0
Award up to 4 marks for logical reasons why it might because incomes may be higher
not, which may include: i.e. reverse of a previous
argument.
• state-owned firms may have been subsidised (1)
investment may be now lower (1) Tax revenue may increase 1
• privatised firms may be profit maximisers (1) may because of a different reason i.e.
become monopolies (1) and may restrict supply (1) to not the reverse of a previous
push up prices (1) lowered quality of goods produced argument e.g. government
(1) creates inequality as not all consumers can afford to spending on subsidies may
buy (1) stimulate the economy more than
• privatised firms may be smaller (1) and so not able to spending on education.
take advantage of economies of scale (1)
• privatised firms do not take account of external costs (1) Note: The question is about the impact on consumers. Do
e.g. pollution (1). not reward answers that relate to the economy or the
government.
Award one mark for an accurate explanation of what is
meant by privatisation.

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Question Answer Marks Guidance

1(h) Discuss whether or not deflation would benefit the 6 Reward but do not expect explanation of benign and malign
Montenegro economy. deflation.

Award up to 4 marks for logical reasons why it might, Allow reference to demand-side deflation but not demand-
which may include: pull deflation or cost-push deflation as they are not
acceptable terms.
• could make products more internationally competitive
(1) leading to greater exports (1) reducing imports (1)
improving the current account balance / reducing a
deficit on the current account (1)
• if caused by advances in technology / supply side
measures e.g. higher labour productivity (1) could
increase output (1) and employment (1) and lead to
economic growth / higher standard of living (1).

Award up to 4 marks for logical reasons why it might

not, which may include:

• current inflation rate is only 0.4% (1)

• greater uncertainty (1) could discourage consumer
spending / investment by firms (1) as households and
firms could expect prices to fall further (1)
• if caused by a fall in total demand (1) could reduce
output (1) and causing recession (1) firms make losses /
go out of business (1) could cause more unemployment
(1) and unemployment is already high at 18% (1)
• could increase a budget deficit (1) due to lower tax
revenue from lower sales taxes / income taxes (1)
increase in unemployment benefits (1).

Award one mark for an accurate explanation of what is

meant by deflation e.g. a fall in the price level is
sufficient here.

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Question Answer Marks Guidance

2(a) Identify two reasons why a person may experience 2 If more than two reasons are given, consider the first three.
absolute poverty.

Two from:
• unemployment
• sickness / mental health / poor health
• old age
• refugees
• war / famine / natural disasters
• lack of government benefits
• low level of education / social skills
• income too low to afford basic necessities.

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Question Answer Marks Guidance

2(b) Explain two causes of an increase in a country’s 4 One mark each for each of two causes identified and one
economic development. mark each for each of two explanations.

Logical explanation which might include: If more than two causes are given, consider the first three.

Improvements in education (1 improve production capacity Note: the development mark might apply to several causes
can raise wages / reduce unemployment (1). and are therefore interchangeable.
Improvements in healthcare (1) can increase life expectancy
(1).
Improvements in technology (1) better quality goods and
services (1)
Increase in savings (1) provide finance for investment (1).
Increase in investment (1) raise quality of output / economic
growth (1).
Increase in FDI (1) can increase job opportunities (1).
Increase in proportion of workers in the tertiary sector (1)
working conditions / pay may be better (1).
Increase in incomes (1) able to buy more goods and
services (1).
Increase in government expenditure on infrastructure (1)
improves labour mobility / access to resources (1).
Increase in international trade / exports (1) creates more
jobs / income (1).
Discovery of new resources (1) e.g. oil improves production
(1).

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Question Answer Marks Guidance

2(c) Analyse, using a production possibility curve (PPC) 6

diagram, the effect of a serious storm on an economy.

Up to 4 marks for the diagram:

Axes correctly labelled with different outputs (1).

Initial curve drawn as a curve/line sloping downward to the
axes (1).
New curve drawn as a curve/line sloping downward to the
axes (1).
Shift indicated by arrow or letter (1).

Up to 2 marks for coherent analysis which might

include:

A serious storm will reduce resources / reduce availability of

factors of production / destroy infrastructure (1) reduce the
ability to produce goods and services / reduce maximum
capacity / reduce productive capacity (1).

Note: both curves must touch both axes to get the marks.

Note: Axes need labelling such as good X / good Y or

capital goods and consumer goods. Labelling A and B is not
sufficient.

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Question Answer Marks Guidance

2(d) Discuss whether or not imposing tariffs on imports will 8

Level Description Marks
increase a country’s output.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis to
evaluate economic issues and situations.
• increase price of imports which may reduce demand for One side of the argument may have more
imports depth than the other, but overall, both sides
• people may switch to buying domestically produced of the argument are considered and
products developed. There is thoughtful evaluation of
• net exports may increase, raising total demand economic concepts, terminology,
• the higher demand may encourage the country’s firms information and/or data appropriate to the
to produce more goods and services question. The discussion may also point out
• government could use tax revenue to subsidise the possible uncertainties of alternative
domestic goods. decisions and outcomes.

Why it might not: 2 A reasoned discussion which makes use of 3–5

economic information and clear analysis to
• even with tariffs, imports may still be cheaper than evaluate economic issues and situations.
domestically produced products The answer may lack some depth and
• there may not be domestically produced substitutes development may be one-sided. There is
• if tariffs are put on raw materials and capital goods, relevant use of economic concepts,
costs of production could rise and demand may fall terminology, information and data
• other countries may retaliate, raising price of exports appropriate to the question.
and reducing demand for the country’s exports.
1 There is a simple attempt at using economic 1–2
Note: level 1 would be knowledge and understanding of definitions and terminology. Some reference
imports and tariffs or just identification of points. may be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

3(a) Identify two types of economic system. 2 Also accept but do not expect: planned / command.
No marks for free market system or controlled market
Market (1) mixed (1). system.

3(b) Explain two functions of a central bank. 4 One mark each for each of two functions identified and one
mark each for each of two explanations.
Logical explanation which might include:
If more than two functions are given, consider the first three.
Operates monetary policy / controls inflation (1) e.g. sets the
rate of interest / manages the money supply (1).

Carries out quantitative easing (1) to stimulate economic

activity during a financial crisis (1).

Issues notes and coins (1) often the only bank allowed to do
so (1).

Acts as bank to the government (1) receives payments to

the government and makes payments on behalf of the
government / manages the national debt (1).

Acts as lender of last resort (1) lends to commercial banks in

difficulties (1).

Holds reserves of foreign currency (1) to influence the

exchange rate (1).

May regulate banking system (1) ensuring banks do not take

too many risks (1).

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Question Answer Marks Guidance

3(c) Analyse the advantages of a young population. 6

Coherent analysis which might include:

A young population may:

be more up to date with modern technology (1) may have

received more education / training / are more skillful (1) be
more productive (1) increase output (1).

add to the labour force (1) increasing productive capacity (1)

greater tax revenue (1) government can spend more e.g. to
improve infrastructure (1).

lead to lower government expenditure on pensions (1) and

health services for the elderly (1) so can spend more on
factors leading to economic growth e.g. education /
infrastructure (1).

be more geographically mobile (1) e.g. have fewer family

ties (1).

be more occupationally mobile (1) less attached to particular

jobs / broader range of skills (1).

spend more of their income than older people (1) be more

innovative (1) able to start their own businesses (1)
increasing output / wealth (1).

be physically fit / stronger (1) less likely to be off sick (1).

be a more skilled labour force (1) will attract investment from

abroad / FDI (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a ban on cars in a city will 8

Level Description Marks
benefit the city’s households and firms.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
argument, making use of economic
Why it might: information and clear and logical analysis
• may reduce air and noise pollution to evaluate economic issues and
• avoid traffic congestion situations. One side of the argument may
• reduce staff absence through illness have more depth than the other, but
• avoid accidents overall, both sides of the argument are
• greater demand for public transport considered and developed. There is
• greater employment in public transport thoughtful evaluation of economic
• pedestrianised shopping centres may attract more concepts, terminology, information and/or
customers data appropriate to the question. The
• free up police and court time discussion may also point out the possible
• raise quality of life uncertainties of alternative decisions and
• frees up funds to spend on better education / health / outcomes.
housing.
2 A reasoned discussion which makes use 3–5
Why it might not: of economic information and clear analysis
• journey times by e.g. bikes may take longer to evaluate economic issues and
• people can enjoy driving situations. The answer may lack some
• may reduce visitors to the area, lowering demand for depth and development may be one-sided.
shops There is relevant use of economic
concepts, terminology, information and
• may lower house prices
data appropriate to the question.
• car sales firms will move out of the area
• reduces labour mobility. 1 There is a simple attempt at using 1–2
economic definitions and terminology.
Note: level 1 would be knowledge and understanding of Some reference may be made to
terms such as ban, city, household or firms or just economic theory, with occasional
identification of points. understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

4(a) Identify two characteristics of money. 2 If more than two characteristics of money are given,
consider the first three.
Two from:
• generally acceptable Accept an explanation of a characteristic e.g. money is easy
• portable to carry rather than using the word portable.
• recognisible
• divisible
• durable
• limited in supply / scarce
• uniformity

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Question Answer Marks Guidance

4(b) Explain two reasons why a reduction in their working 4 Also accept approach from the point of view of why workers
hours may not cause public sector workers to move to would not want to work in the private sector.
working in the private sector.
Logical explanation which might include: One mark each for each of two reasons identified and one
Wages may still be higher in the public sector (1) enabling mark each for each of two explanations.
workers to buy more goods and services (1).
If more than two reasons are given, consider the first three.
Fringe benefits may be better in the public sector (1) e.g.
more generous state pensions (1).

Reduction in working hours results in more leisure time (1)

improving work life balance (1).

Job security may be better in the public sector (1) less worry
about losing jobs / few job opportunities in the private sector
(1).

Skills are not transferable to the private sector (1) e.g.

occupational immobility (1).

Working conditions may be better in the public sector (1)

e.g. better health and safety standards (1).

Reduction in working hours may not result in less pay (1)

making working in the public sector more attractive / may
benefit from more leisure time / reduction in stress at work
(1).

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Question Answer Marks Guidance

4(c) Analyse how advances in technology could affect firms’ 6 Note: Only reward lower cost of production once.
profits.

Coherent analysis which might include:

Advances in technology:

will improve the quality of capital goods (1) this could raise
productivity / efficiency (1) higher output / lower costs of
production (1) increase profits (1).

could raise the quality of products (1) create new products

(1) increase demand / revenue (1).

could lead to new products / innovation (1) which may lead

to lower demand for related products leading to loss of
profits (1) example e.g. development of electric cars has led
to fall in demand for diesel cars (1).

can enable online training of new skills (1) improving

productivity / speeding up training / increases number that
can be trained (1).

can improve internet and social media links (1) able to

contact more potential customers in other countries (1)
thereby increasing revenue / profit (1).

due to the initial high cost of buying / developing advanced

technological equipment (1) can reduce profits in the short
run (1).

could lead to small firms being forced out of business (1)

due to the cost of new technology / and its maintenance (1)
reducing profits / making a loss (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not a decrease in government 8

Level Description Marks
spending will increase unemployment.
3 A reasoned discussion which accurately 6–8
In assessing each answer, use the table opposite. examines both sides of the economic
Why it might: argument, making use of economic
• a cut in government spending could on education / information and clear and logical analysis to
training could reduce skills / qualifications and labour evaluate economic issues and situations.
productivity One side of the argument may have more
• reduction in skills /qualifications could increase depth than the other, but overall, both sides
structural unemployment of the argument are considered and
• cut in government spending on public sector workers’ developed. There is thoughtful evaluation of
wages could reduce, their motivation, may resign economic concepts, terminology,
• lower government spending on providing information information and/or data appropriate to the
about job vacancies could increase frictional question. The discussion may also point out
unemployment the possible uncertainties of alternative
• lower government spending could reduce total demand decisions and outcomes.
which could cause cyclical unemployment.
2 A reasoned discussion which makes use of 3–5
Why it might not: economic information and clear analysis to
• may reduce inflation, making products more evaluate economic issues and situations.
internationally competitive, raising net exports The answer may lack some depth and
• cut in government spending on unemployment benefits development may be one-sided. There is
may reduce frictional unemployment relevant use of economic concepts,
• may enable taxes to be cut which could increase terminology, information and data
consumer spending and investment, leaving total appropriate to the question.
demand and unemployment unchanged
• amount of government spending may fall but it may be 1 There is a simple attempt at using economic 1–2
spent more effectively e.g. training may be more definitions and terminology. Some reference
directed at skills required to fill vacancies. may be made to economic theory, with
occasional understanding.
Note: Level 1 would be knowledge and understanding of
unemployment and government spending or just 0 A mark of zero should be awarded for no 0
identification of points. creditable content.

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Question Answer Marks Guidance

5(a) Define a Consumer Prices Index. 2

A measure of inflation / cost of living (1) using weights /

basket of goods and services (1).

5(b) Explain two ways a government could intervene to 4 One mark each for each of two ways identified and one
reduce market failure. mark each for each of two explanations.

Logical explanation which might include: If more than two ways of government intervention are given,
Subsidise merit goods (goods with positive externalities) (1) consider the first three.
to encourage consumption / production (1).

Tax on demerit goods (goods with negative externalities) (1)

to discourage consumption / production (1).

Apply maximum price on merit goods (1) to increase

consumption (1) OR apply minimum price on demerit goods
(1) to reduce consumption (1)

Finance / produce public goods (1) as private sector firms

will have no incentive to produce them (1).

Regulate monopolies (1) to restrict exploitation of market

power (1).

Provide education / training / public information campaign

(1) to raise awareness of benefits of a merit good /
drawbacks of a demerit good (1)

Provide education / training (1) to increase labour mobility

(1).

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Question Answer Marks Guidance

5(c) Analyse how an increase in a country’s foreign 6

exchange rate could reduce inflation.

Coherent analysis which might include:

A rise in the exchange rate / appreciation of a currency (1)

can increase export prices (1) lower import prices (1).

Net exports may fall (1) exports form part of total demand (1)
reducing demand-pull inflation (1).

Lower import prices will increase pressure for firms to keep

price rises low (1) lower imported raw material prices (1)
reduce costs of production (1) reduce cost-push inflation (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not an increase in a country’s 8

Level Description Marks
economic growth rate will reduce emigration from the
country. 3 A reasoned discussion which 6–8
accurately examines both sides of the
In assessing each answer, use the table opposite. economic argument, making use of
economic information and clear and
Why it might: logical analysis to evaluate economic
• employment may increase issues and situations. One side of the
• people will not have to seek jobs abroad argument may have more depth than
• incomes may rise / poverty may decrease the other, but overall, both sided of the
• tax revenue may be higher, allowing the government to argument are considered and
spend more on e.g. education and healthcare. developed. There is thoughtful
evaluation of economic concepts,
Why it might not: terminology, information and/or data
• incomes may still be low appropriate to the question. The
• income can be unevenly distributed discussion may also point out the
• may not expect rise in growth rate to last possible uncertainties of alternative
• there may be higher economic growth and job decisions and outcomes.
opportunities in other countries
• pollution levels may increase 2 A reasoned discussion which makes 3–5
• may lead to higher external costs e.g. pollution use of economic information and clear
• economic growth comes at cost of worse working analysis to evaluate economic issues
conditions and situations. The answer may lack
• there are other reasons for emigrating. some depth and development may be
one-sided. There is relevant use of
Note: level 1 would be knowledge and understanding of economic concepts, terminology,
economic growth and emigration or just identification of information and data appropriate to the
points. question.

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Question Answer Marks Guidance

5(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/21
Paper 2 Structured Questions October/November 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 27 printed pages.

© Cambridge University Press & Assessment 2024 [Turn over

0455/21 Cambridge IGCSE – Mark Scheme October/November 2024
PUBLISHED
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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an MAX

illogical line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without

any support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

Nothing creditworthy To be used when a candidate has

L misidentified a question they have
O
answered e.g.:
This is an answer to Q4(c) and not Q5(c).

Level 1

Level 2

Level 3

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Question Answer Mark Guidance

1(a) Calculate the percentage of the population who were 1 Accept answer without %
foreign nationals living in the UAE.

89%

1(b) Identify two features of globalisation. 2

The increased connection of people from all over the world

through migration (1) the trade of goods and services (1) the
sharing of ideas (1) technological development (1).

1(c) Explain one factor that can influence labour mobility 2 One mark for a factor identified and one mark for an
between countries. explanation.

• Good transport helping workers to move (1) availability

of flights / development of air travel (1)
• Technological progress / development (1) increasing
quality / quantity of factors production (1)

1(d) Explain one advantage and one disadvantage of 4 One mark for each effect identified and one mark for each
producing a product which is price-inelastic in demand explanation.
such as oil.
Accept responses that consider perfect price inelasticity
Logical explanation which might include: (PED = 0)

Advantage: when price increases, there is a less than

proportionate fall in quantity demanded (1) revenue
generated from the product increases (1) because it’s a
necessity / has no substitutes (1)

Disadvantage: when price decreases, there is a less than

proportionate rise in quantity demanded (1) revenue
generated from this product decreases (1)

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Question Answer Mark Guidance

1(e) Explain the relationship between the oil price and the 4 Responses do not have to be in the format suggested but
UAE’s current account balance. they should address the expected / normal relationship, offer
supporting evidence of that, and analyse the overall data.
Coherent analysis which might include:

Expected relationship:
Positive / direct relationship (1) the oil price and the current
account balance would be expected to move in the same
direction (1).

Supporting Evidence:
As the % change in the price of oil increases, the % change
in the current account balance increases (1) (and vice
versa).

When oil price goes up, the current account balance goes
up, e.g. 2016 – 2018, 2020 – 2022 (1)
When oil price goes down, the current account balance goes
down, e.g. 2019 – 2020 (1).

When the % change in the price of oil is highest, the %

change in the current account balance is also the highest
e.g. 2021 (1).

When the % change in the price of oil is lowest, the %

change in the current account is also the lowest e.g. 2020
(1)

Analysis:
Higher oil prices increase export revenue as demand for oil
is inelastic (1) increases inflows into current account (1).

Exception:
There is no exception evident in the figure (1)

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Question Answer Mark Guidance

1(f) Analyse, using a production possibility curve (PPC) 5

diagram, the effect of technological progress on an
economy such as the UAE.

PPC diagram:

Axes correctly labelled with different outputs (1).

Initial curve drawn as a curve / line sloping downward to the
axes (1).
New curve drawn to the right of the initial curve as a
curve / line sloping downward to the axes (1).
Shift to the right indicated by arrow or PPC1 to PPC2 (1).

Written analysis:
Technological progress can increase productive
capacity / the economy is able to produce more (1).

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Question Answer Mark Guidance

1(g) Discuss whether or not luxury tourism and financial 6 Apply this example to all questions with the command
services have helped Dubai achieve economic word DISCUSS
development. (1g, 1h, 2d, 3d, 4d and 5d)

Award up to 4 marks for logical reasons why it might, which Each point may be credited only once, on either side of an
may include: argument, but separate development as to how / why the
• they attract foreign tourists (1) who spend on goods and outcome may differ is rewarded.
services in Dubai (1) increasing total
demand / economic growth (1) Generic example mark
• employment is generated (1) increasing incomes (1)
and improving living standards (1) Tax revenue may decrease… 1
• increased government’s tax revenues (1) may be spent
on public services / infrastructure / education / healthcare because of reason e.g. incomes may be 1
(1) lower.
• increased export revenues (1) improve the current
account of the balance of payments (1) increase profits Tax revenue may increase because 0
of firms in tourism and financial services (1). incomes may be higher i.e. reverse of a
previous argument.
Award up to 4 marks for logical reasons why it might not,
which may include: Tax revenue may increase because of a 1
• increased pollution (1) environmental damage / external different reason i.e. not the reverse of a
costs e.g. health problems (1) high use of water previous argument e.g. government
resources (1) spending on subsidies may stimulate the
• inequality in the distribution of income (1) some workers economy more than spending on education.
may be paid much lower than others (1)
• spending on luxury tourism and financial services may
change with income (1) depending on them could be
risky (1)
• workers may lack the skills for these occupations (1) be
unable to gain employment to improve living standards
(1)

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Question Answer Mark Guidance

1(h) Discuss whether or not having a fixed exchange rate is 6 Maximum 3 marks for only identifying benefits / disbenefits.
beneficial for a country such as the UAE.

Award up to 4 marks for logical reasons why it might, that

may include:
• currency has more stability (1) it will not
increase / decrease in value (1) avoiding
reduced / increased competitiveness (1)
• maintains investor confidence in the economy (1)
increasing investments (1) increasing total
demand / employment (1)
• may maintain consumer confidence (1) by controlling
inflation (1)
• it can be set at a low rate to gain a competitive
advantage (1).

Award up to 4 marks for logical reasons why might it not,

that may include:
• limits the government’s flexibility (1) with monetary
policy (1) as interest rate changes (1) may be used to
maintain the fixed exchange rate (1)
• other macroeconomic objectives cannot be met (1) e.g.
if a low exchange rate is fixed, inflation might occur (1)
• reserves of foreign currency have to be kept (1) to
maintain the exchange rate (1)
• the fixed exchange rate might not reflect market
conditions (supply and demand) for the currency (1)

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Question Answer Mark Guidance

2(a) Identify two ways of measuring unemployment. 2

claimant count (1)

(labour force) survey (1)

2(b) Explain two factors that could influence living standards 4 One mark for each factor identified and one mark for each
apart from unemployment rates. explanation.

Logical explanation which might include: Accept arguments which describe reasons for either
• income / wage levels (1) higher wages allow people to low / high living standards.
afford more goods and services (1)
• education (1) high education levels lead greater skills Accept answers that give HDI (1) with reference to either
and to better paid jobs / lead to high human GDP per head, education or health.
development index (1)
• health standards / healthcare (1) high health standards
lead to better enjoyment of life / less illness / better well-
being (1)
• cost of living / inflation rate (1) affecting purchasing
power (1)
• working hours (1) lower working hours gives more
leisure time (1)
• hygiene / sanitation (1) good water quality prevents
diseases (1)
• environmental standards (1) e.g. pollution reduces
quality of life (1)
• availability of public / merit goods (1) e.g. street
lights / parks (1)
• crime rates (1) low crime rates improve safety / quality of
life (1)

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Question Answer Mark Guidance

2(c) Analyse how market forces can increase wages. 6 Reward, but do not expect, answers that analyse this
question using elasticity of demand and supply.
Coherent analysis which might include:
• an increase in demand (1) for labour (1) may increase
wages if the demand for a product increases (1) i.e.
derived demand (1), there will be an increase in
demand for workers producing that product (1) for
example, if price of substitutes such as robots
increases, there will be an increase in the demand for
human labour (1)
• a decrease in supply (1) of labour (1) may increase
wages if it is caused by a decrease in the labour force
(1) or a decrease in number of people qualified / having
skills in that occupation (1).

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Question Answer Mark Guidance

2(d) Discuss whether or not free trade will increase 8

economic growth. Level Description Marks

3 A reasoned discussion which 6–8

In assessing each answer, use the table opposite.
accurately examines both sides of
the economic argument, making
Why it might:
use of economic information and
• may enable countries to specialise on what they are
clear and logical analysis to
best at producing
evaluate economic issues and
• higher competition may increase productivity and lower situations. One side of the
costs of production, increasing demand for their argument may have more depth
products than the other, but overall both
• may enable firms to buy raw materials and capital sides of the argument are
goods at a lower price considered and developed. There
• may give firms access to larger markets, enabling them is thoughtful evaluation of
to expand output. economic concepts, terminology,
information and / or data
Why it might not: appropriate to the question. The
• may prevent infant industry from growing discussion may also point out the
• may speed up the closure of declining industries possible uncertainties of
• may replace domestic output with imports alternative decisions and
• may reduce tax revenue outcomes.
• firms may gain monopoly power and may restrict output
• firms may engage in unfair competition e.g. dumping.

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Question Answer Mark Guidance

2(d)
2 A reasoned discussion which 3–5
makes use of economic
information and clear analysis to
evaluate economic issues and
situations. The answer may lack
some depth and development may
be one-sided. There is relevant
use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

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Question Answer Mark Guidance

3(a) Define privatisation. 2

Privatisation is the sale / transfer of assets (1) from the

public sector (1) to the private sector (1).

3(b) Explain how technological innovation can benefit firms. 4 One mark for each identification and one mark for each
relevant explanation.
Logical explanation which might include:
• technological innovation can lead to new / better
technology (1) increasing efficiency / productivity (1)
• higher levels of output (1) economies of scale / reducing
average cost (1) leading to lower prices (1) attracting
consumers (1) leading to higher profits (1)
• improved / faster capital equipment / IT
systems / software (1) producing better quality products
(1)
• more capital-intensive firms (1) reduced labour costs (1)
reduced errors (1).

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Question Answer Mark Guidance

3(c) Analyse the effects of increased competition amongst 6 Accept lower quality (1) due to firms reducing costs (1)
firms.

Coherent analysis which might include:

• lower price (1) as firms try to attract more consumers (1)
this will benefit consumers (1) but could cause firms to
close down (1)
• improved quality / innovation (1) such as longer-lasting
products / products that provide more satisfaction to
consumers / products that consumers want to buy (1)
• increased choice (1) consumers can to choose between
different firms for products (1)
• reduced profits for firms (1) costs may increase because
of the need to improve quality (1) each firm will have
fewer consumers since demand will be distributed
between more firms (1).
• firms may need to spend more on
advertising / marketing (1) increasing costs (1) this may
cause external costs e.g. pollution (1) but may provide
better information to consumers (1).

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Question Answer Mark Guidance

3(d) Discuss whether or not improving education can help a 8

government achieve its macroeconomic aims. Level Description Marks

In assessing each answer, use the table opposite. 3 A reasoned discussion which 6–8
accurately examines both sides of
Why it might: the economic argument, making
use of economic information and
• a more skilled / productive workforce attracts more
clear and logical analysis to
investments leading to higher total demand and
evaluate economic issues and
economic growth
situations. One side of the
• improved education can make finding work easier and
argument may have more depth
may lead to full employment / lower unemployment
than the other, but overall both
• high productivity could lead to lower average cost of sides of the argument are
production leading to more stable prices / low inflation considered and developed. There
• higher level of exports leads to more balance of is thoughtful evaluation of
payments stability economic concepts, terminology,
• education could give everyone the chance to get a well- information and / or data
paid job leading to a more equal redistribution of appropriate to the question. The
income. discussion may also point out the
possible uncertainties of
Why it might not: alternative decisions and
• improving education requires increased government outcomes.
expenditure leading to higher total demand and may
cause inflation
• improved education in the country could lead to
emigration of skilled workers, causing lower economic
growth
• there might not be enough jobs for those highly qualified
leading to increase unemployment amongst
graduates / underemployment
• better education might only be accessible to those on
higher incomes, therefore increasing inequality in
income distribution

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Question Answer Mark Guidance

3(d) • a better educated workforce may demand higher wages

2 A reasoned discussion which 3–5
causing increase costs of production, decreasing price
makes use of economic
competitiveness, worsening the current account of the
information and clear analysis to
balance of payments
evaluate economic issues and
• the gains from improved education are long term, not
situations. The answer may lack
short term.
some depth and development may
be one-sided. There is relevant
use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

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Question Answer Mark Guidance

4(a) Identify two methods of trade protection apart from a 2 Accept any relevant methods.
tariff.

Two from non-tariff barriers:

• import quotas
• subsidies
• embargoes / bans
• licences
• product standards / regulations

4(b) Explain how the price of coffee substitutes and 4 Maximum of 3 marks if only substitutes or complements are
complements can affect the demand for coffee. explained.

Logical explanation which might include:

Relationship between price and demand of substitutes is

positive (1) when price of coffee substitutes increases,
demand for coffee increases, or vice versa (1) because as
price of coffee substitutes increases, coffee is relatively
cheaper (1) demand for the substitute will decrease, and the
demand for coffee will increase (1) e.g. coffee and tea (1).

Relationship between price and demand of complements is

negative (1) when price of coffee complements increases,
demand for coffee falls or vice versa (1) because as price for
coffee complements increases, the demand for the
complement will fall, and therefore the demand for coffee will
decrease (1) e.g. coffee and sugar (1).

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Question Answer Mark Guidance

4(c) Analyse the possible reasons why a government may 6 Maximum of three marks for identification of reasons
want to intervene in a market.

Coherent analysis which might include:

Government may want to intervene in a market due to

market failure / when the market mechanism leads to
inefficient allocation of resources (1)

Reasons for intervention:

• to provide public goods (1) not provided by the market
(1) due to non-rivalry / non-excludability (1) creating the
free rider problem / no profit-incentive for private
producers (1)
• to provide merit goods (1) under-consumed and under-
produced by the market (1) external benefits which are
ignored by the market (1) e.g. vaccinations (1)
• to reduce provision of demerit goods (1) over-consumed
and over-produced by the market (1) external costs are
ignored by the market (1) e.g. pollution (1)
• to reduce monopoly power (1) that creates high prices
(1) while reducing consumer choices (1) and reducing
quality (1)
• to reduce factor immobility (1) factors of production
unable to move around to its best possible use (1) e.g.
labour immobility where workers cannot move around
(1) and therefore are unemployed (1)
• to protect consumers of essential items (1) by setting a
maximum price (1) keeping the price below the market
price (1)
• to protect low paid workers (1) by setting a minimum
wage (1) keeping the wage above the market wage (1)
• to give subsidies / impose tariffs (1) e.g. protect infant
industries (1) so that they can grow in the long-
term / protect employment (1).

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Question Answer Mark Guidance

4(d) Discuss whether or not high tariffs can reduce 8

unemployment. Level Description Marks

In assessing each answer, use the table opposite. 3 A reasoned discussion which 6–8
accurately examines both sides of
Why it might: the economic argument, making
use of economic information and
• high tariffs lead to increase price of imports reducing the
clear and logical analysis to
demand for imports
evaluate economic issues and
• high tariffs make consumers choose domestic products
situations. One side of the
instead which increases demand for domestic workers
argument may have more depth
• high tariffs provide government with extra revenue than the other, but overall both
which could be used to subsidise domestic sides of the argument are
firms / domestic employment considered and developed. There
• high tariffs can be a major source of tax revenue. Some is thoughtful evaluation of
of this could be spent on e.g. education and training economic concepts, terminology,
which will increase workers’ skills and mobility, and so information and / or data
reduce unemployment. appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of
• high tariffs lead to retaliation which leads to decrease in alternative decisions and
demand for exports and therefore decrease demand for outcomes.
domestic workers
• high tariffs still not enough to offset lower cost of imports
• domestic production may not be able to increase due to
full employment / lack of natural resources
• higher prices of imported raw materials could increase
costs of production, so reducing profits and lowering
output
• domestic prices may rise as domestic firms become
complacent as they are protected.

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Question Answer Mark Guidance

4(d)
2 A reasoned discussion which 3–5
makes use of economic
information and clear analysis to
evaluate economic issues and
situations. The answer may lack
some depth and development may
be one-sided. There is relevant
use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

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Question Answer Mark Guidance

5(a) Define labour mobility. 2

The ability of workers to move (1) occupationally (1) or

geographically (1) to take up another job (1).

5(b) Explain the effects of an ageing population on spending 4 Maximum of 3 marks for a relevant explanation of either
and saving levels. spending or saving.

Logical explanation which might include:

An ageing population may mean fewer people are working
and not earning an income (1) therefore savings need to be
withdrawn to fund living (1) and therefore savings will
decrease (1).

An ageing population may mean people have reached an

age where they do not need to save for the future (1) have
accumulated savings (1) therefore spending increases (1).

An ageing population may mean more people are

approaching retirement / have reached retirement (1) there
may be an increase in saving to support living standards in
retirement (1) and decrease current spending (1).

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Question Answer Mark Guidance

5(c) Analyse how a rise in tourism can increase inflation an 6

economy.

Coherent analysis which might include:

Tourism leads to an increase in demand for resources (1)

e.g. food or accommodation (1) therefore these prices will
increase (1) causing demand-pull inflation (1).

Tourists may have higher incomes (1) and higher

purchasing power (1) therefore, producers are able to
charge higher prices (1) and those living the country will
have to pay higher prices as well (1).

Depletion of resources due to tourism (1) decreases supply

of these resources (1) increases the price of these
resources for everyone (1).

Increased demand for factors of production in tourism e.g.

labour (1) increases costs of production (1) may cause cost-
push inflation (1).

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Question Answer Mark Guidance

5(d) Discuss whether or not fiscal policy is effective in 8

reducing poverty. Level Description Marks

In assessing each answer, use the table opposite. 3 A reasoned discussion which 6–8
accurately examines both sides of
Why it might: the economic argument, making
use of economic information and
• policy measures to promote economic growth may
clear and logical analysis to
increase investment and create jobs
evaluate economic issues and
• increased spending on education providing more
situations. One side of the
qualifications / skills, making it easier to find jobs, higher
argument may have more depth
wages
than the other, but overall both
• more generous state benefits increasing income sided of the argument are
• progressive taxation may increase government revenue considered and developed. There
and allow more spending to reduce poverty. is thoughtful evaluation of
• cuts in indirect taxation e.g. VAT, may lower prices of economic concepts, terminology,
goods and services, enabling the poor to buy more and information and / or data
reduce poverty. appropriate to the question. The
discussion may also point out the
Why it might not: possible uncertainties of
• contractionary fiscal policy / increased taxes could lead alternative decisions and
to more people losing jobs / income. outcomes.
• expansionary fiscal policy / tax cuts may be inflationary,
causing higher prices for essential items and increasing
poverty
• education may only be accessible to those not in
poverty
• state benefits may lead to a cycle of poverty
• progressive taxation may lead to brain drain and
therefore less government revenue.
• cuts in higher income tax rates may not reduce absolute
poverty but may increase relative poverty.

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Question Answer Mark Guidance

5(d)
2 A reasoned discussion which 3–5
makes use of economic
information and clear analysis to
evaluate economic issues and
situations. The answer may lack
some depth and development may
be one-sided. There is relevant
use of economic concepts,
terminology, information and data
appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and
terminology. Some reference may
be made to economic theory, with
occasional understanding.

0 A mark of zero should be awarded 0

for no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/22
Paper 2 Structured Questions October/November 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 25 printed pages.

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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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – an illogical MAX

line of thought

Benefit of the doubt Not answered question

Blank page Not established – a statement made without any

support

Caret – a word is missing. Repetition

Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

L Nothing creditworthy To be used when a candidate has

O misidentified a question they have
answered e.g.:
This is an answer to Q4(c) and not Q5(c).

Level 1

Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate the percentage of the Jordanian labour force 1 Accept 19.
employed in the secondary sector.

19% (1).

1(b) Identify two components of the current account of 2 If more than two suggested components are given, consider
Jordan’s balance of payments. the first three.

Trade in services (1) primary income (1). Accept invisibles for trade in services.

1(c) Explain the main type of unemployment experienced by 2 Faill in demand is not sufficient here for fall in total demand
Jordan in 2020. as total demand is given in the source material – must be
macro.
Cyclical unemployment (1) lower total demand / fall in
employment in most industries / number of workers greater Accept ‘demand deficient unemployment for cyclical
than the number of jobs available (1). unemployment.

1(d) Explain two advantages the Jordanian economy may 4 One mark each for each of two advantages identified and
gain from the mergers between its tourism firms. one mark for each of two explanations.

Logical explanation which might include: Lower prices may be linked to either ‘raise output’ etc. or
Lower prices (1) may raise output/GDP/employment/living ‘raise exports’ etc.
standards / may be the result of taking advantage of Similarly higher quality may be linked to ‘raise exports etc.’
economies of scale (1). or ‘raise output etc.’.
Higher quality (1) may raise exports / reduce current account
deficit / increase international competitiveness / increase
tourism revenue / more foreign currency / may be the result
of sharing ideas (1).

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Question Answer Marks Guidance

1(e) Analyse the relationship between birth rate and average 4 Responses do not have to be in the format suggested but
age. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.

Expected relationship (up to 2 marks): Accept analysis based on how differences in the average of
Countries with a low birth rate are likely to have a high population may affect the birth rate.
average age (1) an inverse relationship / negative
relationship / move in opposite directions (1). For supporting evidence and the second ‘exception’ mark,
comparisons must be made. No marks for just stating the
Supporting evidence (up to 2 marks): birth rate and average age figures.
Four countries with the lowest birth rates had the highest
average age (1) Monaco had the lowest birth rate and the
highest average age (1) Niger with the highest birth rate has
the lowest average age (1) e.g. Germany has a lower birth
rate and a higher average age than Jordan (1).

Analysis of expected relationship (up to 2 marks):

A low birth rate would mean that children would form a small
proportion of the population / a high birth rate may mean
children would form a high proportion of the population / it
would increase the proportion of people aged over 65 (1). A
high birth rate may indicate low living standards / lower
income which may be associated with low life expectancy
(1). A high average age may mean that there are fewer
people of child-bearing age (1).

Exception (up to 2 marks):

Venezuela or Maldives (1) Maldives had a lower birth rate
than Venezuela but the same average age (1).

Analysis of exception (up to 1 mark):

The average age of a country’s population is also influenced
by the death rate and net migration (1).

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Question Answer Marks Guidance

1(f) Analyse, using a demand and supply diagram, how an 5

increase in population size will affect the market for
clothing.

Coherent analysis which might include:

D&S diagram:
Axes correctly labelled – price and quantity or p and q (1).
Original demand and supply curves correctly labelled (1).
New demand curve shifted to the right (1).
Equilibriums – shown by lines P1 and Q1 and P2 and Q2 or
equilibrium points marked as E1 and E2 (1).

Written analysis:
An increase in population size will increase the number of
consumers / increase demand for clothes / price increases
(1).

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Question Answer Marks Guidance

1(g) Discuss whether or not the Jordanian government 6 Apply this example to all questions with the command
should spend more on renewable energy. word DISCUSS
(1g, 1h, 2d, 3d, 4d and 5d)
Award up to 4 marks for logical reasons why it should, which
may include: Each point may be credited only once, on either side of an
• need for more energy due to an increase in population argument, but separate development as to how/why the
(1) non-renewable sources of energy will run out / outcome may differ is rewarded.
reduced dependency on fossil fuels (1) may reduce
import bills (1) Generic example mark
• would reduce environmental damage (1) reduce
external costs (1) lower pollution (1) reduce extent of Tax revenue may decrease… 1
climate change / global warming / promote sustainable
development (1) improve health (1). ...because of reason e.g. incomes may be 1
• cheaper in the longer run (1) solar and wind power are lower.
free goods (1) lower costs of production (1) reduce
household bills (1). Tax revenue may increase because incomes 0
may be higher i.e. reverse of a previous
Award up to 4 marks for logical reasons why it should not, argument.
which may include:
• expensive to build (1) opportunity cost (1) example (1) Tax revenue may increase because of a 1
• relies on weather (1) supplies may be disrupted / different reason i.e. not the reverse of a
insufficient / unreliable (1) previous argument e.g. government spending
• cost of renewable energy projects may increase with on subsidies may stimulate the economy more
high interest than spending on education.
• rates (1) may be funded by borrowing (1) may increase
taxes (1)
• may cause visual pollution (1) e.g. wind turbines (1).

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Question Answer Marks Guidance

1(h) Discuss whether or not the Jordanian central bank 6 Some points e.g. discouraged spending may be considered
should have raised the rate of interest in 2021. from either side but see guidance table on 1f.

Award up to 4 marks for logical reasons why it should have,

which may include:
• total demand predicted to increase / may have reduced
total demand (1) encouraged saving (1) discouraged
spending / borrowing (1) lowered demand-pull (1)
inflation (1) reduced imports (1)
• may have attracted more funds for the Jordanian
government to borrow / use (1) for e.g. renewable
energy projects (1).

Award up to 4 marks for logical reasons why it should not

have, which may include:
• cost of government borrowing would have increased /
may have difficulty paying off government debt (1)
• investment may have been discouraged (1) lowered
economic growth (1) reduced growth in employment /
caused unemployment (1)
• may have increased the exchange rate (1) foreigners
depositing money in the country’s banks / attracted hot
money flow (1) raised export prices / lowered import
prices / decreased exports / increased imports (1)
reduced tourism (1) increased the current account
deficit (1).

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Question Answer Marks Guidance

2(a) Identify two places where a production point could be 2 The points may be identified on a diagram.
located on a PPC diagram.
Accept below the curve and above the curve.
Two from:
• point inside the curve / left of the curve
• point on the curve / along the curve
• point outside the curve / right of the curve

2(b) Explain two reasons why someone may switch from 4 One mark each for each of two reasons identified and one
eating in one restaurant to eating in another restaurant. mark for each of two explanations.

Logical explanation which might include:

(Change in) prices (1) lower price making it more affordable
/ substitutes / save money (1).
(Change in) quality (1) better ingredients / better cleanliness
/ quicker service / new menu / more satisfaction / better
taste / change in staff (1).
(Change in) convenience (1) e.g. longer opening hours / /
better location (1)
(Change in) facilities (1) e.g. better restrooms (1).
(Change in) income (1) enabling some to eat in more
expensive restaurants (1).
(Change in) consumer tastes (1) switch to e.g. vegan
restaurant (1)
Advertising (1) may attract/persuade customers / increase
attractiveness (1).
(Change in) quantity provided (1) lower quantity may
represent lower value for money (1).

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Question Answer Marks Guidance

2(c) Analyse why the wage of a chief executive of a large 6 Note: may also be answered from the point of view why the
commercial bank is higher than that of a waiter. wage of a waiter may be lower than that of a chief executive.

Coherent analysis which might include: No marks here for banks may be more profitable than
restaurants as e.g. a cleaner in a bank may have a lower
Chief executive may be more qualified / more educated (1) wage than a waiter.
received more training (1) more skilled / talented (1) more
productive (1) more experienced (1) higher level of
responsibility / higher level of stress / more demanding job
(1) in shorter supply / harder to replace (1) more inelastic
supply (1).
Chief executive may be in higher demand (1) more inelastic
demand (1).
Chief executive may have stronger bargaining power (1)
may be more likely to be in a trade union / professional body
(1).
May be less likely to be in a group that is discriminated
against (1) e.g. migrant workers (1).
Chief executive may work longer hours (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not free trade will increase 8 Level Description Marks
economic growth.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
• may enable countries to specialise on what they are logical analysis to evaluate economic
best at producing issues and situations. One side of the
• higher competition may increase productivity and lower argument may have more depth than
costs of production, increasing demand for their the other, but overall both sides of the
products argument are considered and
• may enable firms to buy raw materials and capital developed. There is thoughtful
goods at a lower price evaluation of economic concepts,
• may give firms access to larger markets, enabling them terminology, information and/or data
to expand output. appropriate to the question. The
discussion may also point out the
possible uncertainties of alternative
Why it might not: decisions and outcomes.
• may prevent infant industry from growing 2 A reasoned discussion which makes 3–5
• may speed up the closure of declining industries use of economic information and clear
• may replace domestic output with imports analysis to evaluate economic issues
• may reduce tax revenue and situations. The answer may lack
• firms may gain monopoly power and may restrict output some depth and development may be
• firms may engage in unfair competition e.g. dumping. one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for 0
no creditable content.

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Question Answer Marks Guidance

3(a) Define foreign exchange market. 2

An arrangement / place (1) where different countries’

currencies are bought/demanded (1) and sold/supplied (1)
one currency is exchanged for another currency (1).

3(b) Explain two reasons why a firm may adopt labour- 4 One mark each for each of two reasons identified and one
intensive production. mark for each of two explanations.

Logical explanation which might include:

• Labour may be low in price / wages may be low (1)
which might make labour cheaper than capital / there
may be a high supply of labour (1).
• Labour may be very productive / efficient (1) which can
make employment profitable / result in low costs of
production (1).
• The government may subsidise the employment of
workers (1) to reduce unemployment (1).
• The firm may provide personal services (1) with
individual attention (1).
• Labour may be more creative / adaptable / provide
feedback (1) produce high quality products / improve
methods of production (1)
• Labour may be unskilled / low level of education (1)
unable to use high-tech capital equipment (1).

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Question Answer Marks Guidance

3(c) Analyse how the macroeconomic aims of economic 6

growth and balance of payments stability may conflict.

Coherent analysis which might include:

Economic growth may increase employment (1) increase

wages / incomes / purchasing power (1) this may increase
imports (1).
Higher consumer spending (1) may encourage firms to
switch products to the domestic market (1) reduce exports
(1) increase / cause a current account deficit (1).
To produce more goods and services, firms may import
more raw materials (1) capital goods (1).
Economic growth may result in inflation (1) which would
make domestic products less price competitive (1).
Economic growth may deplete resources (1) increase need
for imports (1).
Economic growth may be export-led (1) may be achieved by
restricting imports (1) result in a current account surplus (1).
Migrant workers may send more money home (1).
Export-led growth may increase the exchange rate (1) which
may increase imports / reduce exports (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a high level of poverty is likely 8 Level Description Marks
to exist in a market economic system.
3 A reasoned discussion which 6–8
In assessing each answer, use the table opposite. accurately examines both sides of the
economic argument, making use of
Why it might: economic information and clear and
• may be unemployment logical analysis to evaluate economic
• lack of welfare benefits issues and situations. One side of the
• likely to be income inequality argument may have more depth than
• merit goods including healthcare and education may be the other, but overall both sides of the
under-consumed and so underproduced argument are considered and
developed. There is thoughtful
• monopolies may develop resulting in higher prices.
evaluation of economic concepts,
terminology, information and/or data
Why it might not:
appropriate to the question. The
• competition / profit motive may result in low prices
discussion may also point out the
• efficiency is encouraged which can result in high wages
possible uncertainties of alternative
and high employment
decisions and outcomes.
• greater response to changes in consumer demand, may
increase economic growth 2 A reasoned discussion which makes 3–5
• countries with efficient private sector firms may have use of economic information and clear
relative poverty but low absolute poverty. analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.
1 There is a simple attempt at using 1–2
economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.
0 A mark of zero should be awarded for 0
no creditable content.

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Question Answer Marks Guidance

4(a) Define an extension in demand. 2 May be shown by a movement down a demand curve
caused by a fall in price.
A movement along a demand curve (1) higher demand (1)
caused by a fall (1) in price (1). Not accepting: an increase in demand but accepting: an
increase in quantity demanded.

4(b) Explain two external costs that may be caused by 4 One mark each for each of two costs identified and one
exploring for oil. mark for each of two explanations.

Logical explanation which might include: Reduce tourism may be given as an identification or as an
explanation of e.g. ‘Damage to the natural environment’
Air pollution / pollution (1) those living nearby may
experience a reduction in air quality / contribute to climate
change/global warming / reduced health (1).
Noise pollution (1) disturbing sleep (1).
Water pollution / oil spillage (1) damage health (1).
Damage to the natural environment / land / deforestation (1)
destroy wildlife habitats / cause global warming / climate
change (1).
Reduce tourism (1) lower employment (1).
Congestion (1) increasing transport costs (1).

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Question Answer Marks Guidance

4(c) Analyse how growth in a country’s tertiary sector can 6

increase its living standards.

Coherent analysis which might include:

May have high productivity (1) increase output (1) increase

employment / reduce unemployment (1).
May pay higher wages (1) allowing workers to consume
more goods and services / afford education / afford
healthcare / reduce poverty / buy more necessities / buy
some luxuries/wants (1).
May provide good working conditions (1) less tiring / less
physically demanding (1) resulting in good health of workers
(1) few accidents (1).
May involve expansion of education (1) increasing future
employment / workers’ skills (1) earning prospects (1)
increase quality of output (1) increase HDI value (1).
More transport services (1) could reduce prices / lower
congestion / reduce stress (1).
Growth of entertainment industry (1) improve leisure time
(1).
May involve expansion of healthcare (1) increase life
expectancy / better health (1).
May increase tax revenue (1) enabling the government to
spend more on e.g. education (1).
Less pollution (1) less environmental damage / less climate
change / less global warming (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not workers who lose their jobs are 8 Reward but do not expect reference to hysteresis.
likely to stay unemployed for a long time.
Level Description Marks
In assessing each answer, use the table opposite.
3 A reasoned discussion which 6–8
Why they might: accurately examines both sides of the
• may lose skills / unskilled workers may have greater economic argument, making use of
difficulty than skilled workers in finding another job economic information and clear and
• may become out of date with advances in technology / logical analysis to evaluate economic
working practices issues and situations. One side of the
• may be expensive for firms to employ as may need argument may have more depth than
extra training the other, but overall both sides of the
• may lose confidence argument are considered and
• may become less attractive to employers developed. There is thoughtful
• more likely to stay unemployed if a result of evaluation of economic concepts,
cyclical/structural rather than frictional unemployment terminology, information and/or data
• may be high unemployment benefits. appropriate to the question. The
discussion may also point out the
Why they might not: possible uncertainties of alternative
• may receive government training decisions and outcomes.
• may be geographically/occupationally mobile
• gap between wages and state benefits may encourage 2 A reasoned discussion which makes 3–5
the unemployed to seek work use of economic information and clear
• economy may grow, expanding employment analysis to evaluate economic issues
opportunities and situations. The answer may lack
• may leave the labour force, e.g. retire / emigrate some depth and development may be
• may be seasonally unemployed. one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

4(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

Question Answer Marks Guidance

5(a) Identify two examples of labour employed in the tourism 2 Also accept skilled and unskilled.
industry.
Do not accept driver or car driver on their own. Could accept
Two from e.g. e.g. a driver who transports tourists,
• tour guides
• hotel manager / hotel worker
• travel agent
• flight attendant
• coach / bus driver

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Question Answer Marks Guidance

5(b) Explain two reasons why countries with a good 4 One mark each for each of two reasons identified and one
transport system often have a high GDP. mark for each of two explanations.

Logical explanation which might include: Accept: increase accessibility.

Lower firms’ costs of production (1) cheaper to move

goods/imports/exports / move goods/raw
materials//imports/exports more efficiently / increase
international competitiveness and so increase exports /
higher income / increase size of markets / higher total
demand (1).
Reduce wastage (1) food etc more likely to arrive fresh and
so increase earnings for sale of e.g food / higher profits (1).
Increase labour mobility / easier to get to work (1) reduce
unemployment / increase productivity (1).
Less congestion (1) less stress / less time lost (1).
Increase (earnings from) tourism (1) cheaper / easier to
move around the country (1).
Attract MNCs/FDI / increase investment (1) increase
employment (1) increase productive capacity (1).
Fewer accidents (1) avoid loss of workers / avoid loss of
working hours (1).
Less pollution (1) healthier labour force (1).

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Question Answer Marks Guidance

5(c) Analyse the benefits consumers may gain from a 6

competitive market.

Coherent analysis which might include:

A competitive market has a large number of firms producing

the product / no barriers to entry (1) substitutes available (1).
Low prices (1) as firms try to gain a larger share of the
market / attract consumers / increase purchasing power (1).
High quality (1) as competition can increase efficiency (1)
increase innovation (1).
Choice (1) different versions of the product may be
produced / greater range of products / greater variety (1).
Responsive to changes in consumer demand (1) consumer
sovereignty (1).

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Question Answer Marks Guidance

5(d) Discuss whether or not an increase in trade union Maximum of L2 4 marks if candidate answers in reverse
membership will benefit an economy. based on a misinterpretation – an increase in trade union
fees.
In assessing each answer, use the table opposite.
Level Description Marks
Why it might:
• rise in wages and improved working conditions may 3 A reasoned discussion which 6–8
increase productivity accurately examines both sides of the
• higher wages may increase total demand which may economic argument, making use of
increase real GDP economic information and clear and
• improved working conditions would increase living logical analysis to evaluate economic
standards issues and situations. One side of the
• by providing a channel of communication, it may reduce argument may have more depth than
conflicts between workers and employers the other, but overall both sided of the
• by helping with training may raise output. argument are considered and
developed. There is thoughtful
evaluation of economic concepts,
Why it might not: terminology, information and/or data
• higher wages may increase inflation appropriate to the question. The
• may take industrial action e.g. strikes which could lower discussion may also point out the
output / GDP possible uncertainties of alternative
• may resist job losses / introduction of new technology decisions and outcomes.
which may prevent increases in efficiency.
2 A reasoned discussion which makes 3–5
use of economic information and clear
analysis to evaluate economic issues
and situations. The answer may lack
some depth and development may be
one-sided. There is relevant use of
economic concepts, terminology,
information and data appropriate to
the question.

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Question Answer Marks Guidance

5(d)
Level Description Marks

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for 0

no creditable content.

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Cambridge IGCSE™

ECONOMICS 0455/23
Paper 2 Structured Questions October/November 2024
MARK SCHEME
Maximum Mark: 90

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the
details of the discussions that took place at an Examiners’ meeting before marking began, which would have
considered the acceptability of alternative answers.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2024 series for most
Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level
components.

This document consists of 24 printed pages.

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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 descriptions 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.

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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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Social Science-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
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 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark
for each answer
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all
other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent
stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any
exceptions to this general principle will be noted.

4 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.

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Subject Specific Marking Principles (point-based marking)

2 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 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 credit alternative answers/examples which are not written in the mark scheme if they are correct
c 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. erosion/corrosion).

5 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

6 Calculation questions:
• The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark for each
answer.
• If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all other
instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown.
• Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent stages.
• Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ (OFR) applies: full marks will be
given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any exceptions to
this general principle will be noted.

7 Annotation:
• For point marking, ticks are used to indicate correct answers and crosses to indicate wrong answers. There is a direct relationship between
ticks and marks.

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• Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners who mark
that paper.
• For levels of response marking, each level awarded should be clearly annotated on the script the first time it is achieved.

Common examiner annotations on 0455/2281/0987 and 2286

Uncertain what the candidate means – MAX

an illogical line of thought
Benefit of the doubt Not answered question

Blank page Not established – a statement made without any

support
Caret – a word is missing. Repetition
Confused SEEN

Cross Tick – a credit worthy point

Highlight Too vague

Nothing creditworthy To be used when a candidate has

L misidentified a question they have
O
answered e.g.:
This is an answer to Q4(c) and not Q5(c).
Level 1
Level 2

Level 3

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Question Answer Marks Guidance

1(a) Calculate the average cost of producing a car in Belarus 1 Accept 10 650 or 0.010650million or 0.1065m.
in 2021. Needs to be to at least 2 dp e.g. 0.011m

$10 650 (1).

1(b) Identify two reasons why Belarus is described as a 2

mixed economy.

• There is a public sector / some people work in the public

sector / there are state-owned firms / there is
government intervention e.g. fining the unemployed (1).

• There is a private sector (1).

1(c) Explain the type of inflation experienced by Belarus. 2

Cost-push (1) due to a rise in the price of energy / increase

in costs of production of firms (1).

1(d) Explain two reasons why the production possibility 4 One mark each for each of two reasons identified and one
curve (PPC) of Belarus may have shifted to the left mark for each of two explanations.
between 2011 and 2021.
No marks for drawing a PPC diagram.
Logical explanation which might include:

• a decline in the size of the country’s labour force (1)

reduction in the quantity of resources / fewer workers
will be likely to reduce country’s ability to produce
products (1)
• a decrease in the number of students going to university
(1) reduce quality of resources / labour skills /
productivity / (1).

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Question Answer Marks Guidance

1(e) Analyse the relationship between life expectancy and 4 Responses do not have to be in the format suggested but
HDI value. they should address the expected/normal relationship, offer
supporting evidence of that, highlight any exceptions to that,
Coherent analysis which might include: and analyse the overall data.

Expected relationship: Note: simply repeating the data is not enough for a mark as
• a high life expectancy would be expected to be it is only description whereas the skill being tested is
associated with a high HDI value (1) analysis.
• positive relationship / direct relationship / move in the
same direction (1).

Supporting evidence:
• two countries with the longest life expectancy have the
highest HDI value OR two countries with the lowest life
expectancy also have the lowest HDI value (1)

• specific reference to a country e.g. Norway had the

longest life expectancy and the highest HDI value (1).

Analysis of expected relationship:

• life expectancy is one of the components of HDI (1)
accounts for a third of its value / explanation of how
better health / life expectancy raises standard of living
(1).

Exception:
• Belarus / Thailand (1) Belarus has a shorter life
expectancy but a higher HDI value (1).

Analysis of exception:
• there are other components of the HDI: education /
GDP (GNI) per head (1).

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Question Answer Marks Guidance

1(f) Analyse, using a demand and supply diagram, how 5

subsidising the production of milk would affect the
market for milk.

Coherent analysis which might include:

D&S diagram:
• axes correctly labelled – price and quantity or P and Q
(1)

• original demand and supply curves correctly labelled (1)

• new supply curve shifted to the right (1)

• equilibriums – shown by lines P1 and Q1 and P2 and Q2

or equilibrium points marked as E1 and E2 (1).

Written analysis:
• reduction in cost of production / increase in supply /
increase in quantity traded / reduction in price (1).

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Question Answer Marks Guidance

1(g) Discuss whether or not the construction of electric 6 Apply this example to all questions with the command
vehicle charging stations would benefit an economy. word DISCUSS
(1(g), 1(h), 2(d), 3(d), 4(d) and 5(d)
Award up to 4 marks for logical reasons why it might
benefit, which may include: Each point may be credited only once, on either side of an
• likely to encourage use of electric vehicles (1) stations argument, but separate development as to how/why the
and vehicles are complements (1) outcome may differ is rewarded.
• improve the environment (1) reduce external costs (1)
including air / noise pollution (1) reduce healthcare Generic example Mark
costs / improve health of workers (1)
• building the stations / building more electric cars may Tax revenue may decrease… 1
create employment (1)
• government / private sector investment / purchase of ...because of reason e.g. incomes 1
electric vehicles may raise total (aggregate) demand (1) may be lower.
causing higher output / economic growth (1).
Tax revenue may increase 0
Award up to 4 marks for logical reasons why it might not because incomes may be higher
benefit, which may include: i.e. reverse of a previous
• other forms of transport may have more beneficial argument.
effects on the environment (1) e.g. cycling / buses (1)
• some people may be reluctant to switch (1) price of Tax revenue may increase 1
electric cars may be too high (1) resources are wasted because of a different reason i.e.
(1) not the reverse of a previous
• if people do switch, it may cause unemployment (1) in argument e.g. government
e.g. oil firms / production of diesel and petrol cars / less spending on subsidies may
public transport (1) stimulate the economy more than
• Increase in electric vehicles on road (1) causes road spending on education.
congestion (1)
• Opportunity cost of government investment (1) monies
could have been spent e.g. education /health /
infrastructure (1)
• If economy at full employment (1) investment may lead
to demand-pull inflation (1).

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Question Answer Marks Guidance

1(h) Discuss whether or not people should be fined for being 6

unemployed.

Award up to 4 marks for logical reasons why they should

be fined, which may include:
• if frictional unemployment (1) a fine would encourage
workers to put more effort into finding a job (1) spend
less time between jobs (1) help move economy towards
full employment (1) higher output (1) and economic
growth (1)
• fines may increase government revenue (1) which could
be spent on e.g. healthcare / support to find a job (1)
• may not be seeking a job as receive benefits (1) fines
may encourage them to find work and reduce
government spending on unemployment benefits (1).

Award up to 4 marks for logical reasons why they should

not be fined, which may include:
• may be a lack of suitable jobs available (1) the
unemployed may have lacked the skills required (1)
may not have been able to move to other areas of the
country (1) may have disabilities / ill-health (1) providing
support may reduce unemployment more quickly (1)
• unemployment may be structural / cyclical (1) it would
have been more effective to increase training (1)
increase total demand (1)
• unemployed may have little income to pay the fine (1)
may increase their debt (1) lead to greater poverty /
unable to pay for basic necessities (1) affect their
mental health / wellbeing / causes depression (1)
• may encourage the growth of the
shadow/unofficial/informal economy (1) as not
registered as unemployed (1)
• may reduce wages (1) workers may be forced to accept
low-paid jobs (1).

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Question Answer Marks Guidance

2(a) Identify two influences on the proportion of income 2 These are the most common influences. Give credit for other
saved by households. relevant influences.

Two from: Accept any two from the first three responses.
• rate of interest
• level of (disposable) income / earnings / wealth /
taxation
• confidence / economic outlook
• advertising / availability of saving schemes
• strength of financial institutions
• age of / number of dependents in household
• social convention / culture
• cost of living / spend on basic necessities / inflation.

2(b) Explain two characteristics of monopoly. 4 One mark each for each of two characteristics identified and
one mark for each of two explanations.
Logical explanation which might include:

• only firm (1) dominant market share / no effective

competition / substitutes / controls the market (1)

• high barriers to entry (1) difficult for new firms to enter

industry (1)

• price maker (1) able to set the price / demand is

inelastic / only choice for consumers (1)

• can control supply (1) causing higher prices / makes

high profits (1)

• unique product (1) result of profits reinvested in R&D (1)

• large size (1) benefits from economies of scale / low

average costs (1).

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Question Answer Marks Guidance

2(c) Analyse the causes of migration between countries. 6 Note: apply a limit of three marks for simply identifying
causes with no analysis given.
Coherent analysis which might include:

Pull factors:

• people may move to gain higher income / move to high-

income countries / countries with higher wages (1)
move to countries with more job opportunities / lower
unemployment (1) people move to increase goods and
services they can consume / higher standard of living
(1)

• people may move to gain better healthcare (1) to

increase life expectancy / quality of life (1)

• people may move to gain better education / attend

university (1) to increase their children’s chance of
gaining employment (1) and high pay (1)

• may have family members in another country (1)

example of why move to be with family members (1).

Push factors:

• people may move to countries to escape conflict / high

crime / high corruption (1) racial and religious
intolerance (1) famine (1) pollution (1) climate change /
better environment (1) escape poverty (1) high taxes (1)
to increase safety (1).

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Question Answer Marks Guidance

2(d) Discuss whether or not government intervention can 8

overcome the disadvantages of a market economic Level Description Marks
system.
3 A reasoned discussion which accurately 6–8
examines both sides of the economic
In assessing each answer, use the table opposite.
argument, making use of economic
information and clear and logical analysis
Why it might: governments
to evaluate economic issues and
situations. One side of the argument may
• provide merit goods which may be under-consumed
have more depth than the other, but
• restrict demerit goods which may be over-consumed overall both sides of the argument are
• provide public goods which would not be supplied by considered and developed. There is
the private sector thoughtful evaluation of economic
• may provide products or benefits for those with low concepts, terminology, information and/or
purchasing power data appropriate to the question. The
• may regulate monopolies / prevent mergers discussion may also point out the
• may address external costs such as pollution possible uncertainties of alternative
• set price ceiling to keep prices low decisions and outcomes.
• set minimum wages to reduce exploitation of workers.
2 A reasoned discussion which makes use 3–5
Why it might not of economic information and clear
analysis to evaluate economic issues and
• may be government failure situations. The answer may lack some
• government may lack accurate information depth and development may be one-
• may take time to make decisions / bureaucratic sided. There is relevant use of economic
• may reduce incentives concepts, terminology, information and
• may be corruption. data appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

3(a) Identify two decision-makers involved in economics. 2 Accept any two from first three responses made.

Two from: Accept buyers and sellers.

• households / consumers
• workers / trade unions
• firms / producers / entrepreneurs / suppliers
• the government
• banks

3(b) Explain the relationship between: 4 One mark each for each of two relationships identified and
one mark for each of two explanations.
(i) demand for tennis racquets and demand for
badminton racquets
• Substitutes (1) an inverse / indirect/ negative
relationship / competitive goods (1) rise in the price of
one would cause the demand for the other to increase /
people switch between the two (1).

(ii) demand for tennis racquets and demand for tennis

balls.
• Complements (1) a direct / positive relationship (1)
bought to be used together / rise in the price of one
would cause the demand for the other to decrease (1).

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Question Answer Marks Guidance

3(c) Analyse why most cleaners earn a low wage. 6 Note: low demand is not acceptable as an answer
unless it is in the context of comparison to higher
Coherent analysis which might include: supply.

• high supply / most people can do it / easily replaced (1)

elastic supply (1) have low occupational mobility (1)
firms do not have to pay high wages to attract sufficient
number of cleaners (1)

• low qualifications / education (1) low skills / training

required (1) may have low productivity / add little value
to the business (1) low risk for workers (1)

• may not belong to a trade union (1) low bargaining

power (1) hard to move to another job (1) so willing to
accept low pay (1) rather than not have a job (1)

• may be from groups that are discriminated against (1)

e.g. women / older persons / immigrants (1)

• some work part-time (1) so take-home pay may be low

(1)

• might be replaced by cleaning machines / robots (1) if

wages rise too high (1).

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Question Answer Marks Guidance

3(d) Discuss whether or not a government should tax sports 8

equipment. Level Description Marks

3 A reasoned discussion which accurately 6–8

In assessing each answer, use the table opposite.
examines both sides of the economic
argument, making use of economic
Why it should tax sports equipment:
information and clear and logical analysis
to evaluate economic issues and
• an additional source of tax revenue
situations. One side of the argument may
• other goods and services/ forms of leisure equipment have more depth than the other, but
are taxed overall both sides of the argument are
• not a necessity considered and developed. There is
• the rich may spend more on sports equipment. thoughtful evaluation of economic
• elite / professional sports persons are well paid / receive concepts, terminology, information and/or
sponsorship so can afford increased prices. data appropriate to the question. The
discussion may also point out the possible
Why it should not tax sports equipment: uncertainties of alternative decisions and
outcomes.
• increase in prices may discourage people from playing
sport especially those on low incomes 2 A reasoned discussion which makes use 3–5
• sport may be considered to be a merit good of economic information and clear
• may reduce health and fitness of people analysis to evaluate economic issues and
• may reduce output of sports equipment and increase situations. The answer may lack some
unemployment depth and development may be one-
• many people employed in sport and leisure industries. sided. There is relevant use of economic
concepts, terminology, information and
data appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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Question Answer Marks Guidance

4(a) Define supply 2 Accept an incomplete answer for one mark e.g. amount of a
good/service produced by a firm / available in the market (1).
The willingness (1) and ability to sell/provide a good/service
(1).

4(b) Explain the difference between the private sector and 4 Alternatively candidates may present as
the public sector.
Motive: profit v social welfare
Logical explanation which might include: Ownership: individuals / firms v government

• private sector is operated and owned by individuals /

firms (1) and decisions are made based on self-interest
/ profits / own utility / efficiency (1)

• public sector is operated and owned by the government

(1) and decisions are made based on the overall welfare
of society / people / externalities (1).

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Question Answer Marks Guidance

4(c) Analyse the causes of differences in economic development 6 Do not reward economic growth as being the same as
between countries. economic development
Coherent analysis which might include differences in:

• level of income (1) affecting levels of affordability (1)

and consumption of various goods and services (1)

• education (1) affecting skills / productivity (1) job

opportunities (1) purchasing power (1)

• healthcare (1) affecting life expectancy (1) level of

labour absences from work (1) output (1)

• levels of population growth (1) affecting size of

workforce (1) affecting dependency ratios (1) which
could also affect cost of labour (1)

• size of primary, secondary and tertiary sectors (1) large

size primary sector usually leads to lower levels of
development than the other two sectors (1) lower value
added in primary / higher value added in secondary and
tertiary (1)

• government expenditure / overseas investment (FDI) (1)

e.g. in infrastructure projects / education/healthcare (1)
raising job opportunities / reducing poverty (1)

• availability / development of resources / factors of

production (1) e.g. beautiful landscape / labour (1)
impact on economic development (1).

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Question Answer Marks Guidance

4(d) Discuss whether or not the employment of migrant

workers can benefit an economy Level Description Marks

3 A reasoned discussion which accurately 6–8

In assessing each answer, use the table opposite.
examines both sides of the economic
argument, making use of economic
Why it might benefit: migrant labour
information and clear and logical analysis
to evaluate economic issues and
• increases supply of labour –reduce wage cost
situations. One side of the argument may
• increases the quantity of factors of production in the have more depth than the other, but
economy overall both sides of the argument are
• increase productive capacity of the economy and considered and developed. There is
economic growth thoughtful evaluation of economic
• more skilled concepts, terminology, information and/or
• more productive data appropriate to the question. The
• takes up jobs that locals don’t want to take up discussion may also point out the
• income received may create new jobs. possible uncertainties of alternative
decisions and outcomes.
Why it might not benefit: migrant labour
2 A reasoned discussion which makes use 3–5
• Increases unemployment – takes jobs from local of economic information and clear
workers analysis to evaluate economic issues and
• usually willing to take jobs at lower pay than local labour situations. The answer may lack some
lowering wage rates for all workers depth and development may be one-
• means economy may not have capacity to sided. There is relevant use of economic
accommodate them leading to lack of housing and other concepts, terminology, information and
infrastructure. data appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for no 0

creditable content.

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0455/23 Cambridge IGCSE – Mark Scheme October/November 2024
PUBLISHED
Question Answer Marks Guidance

5(a) Define a central bank. 2

• A government owned bank (1).

• Operates monetary policy / sets interest rates /manages

foreign exchange rates(1).

• Provides banking services to the government /

commercial banks (1).

5(b) Explain two ways a commercial bank could attract more 4 One mark each for each of two reasons identified and one
customers. mark for each of two explanations.

Logical explanation which might include:

• lower interest rate on loans (1) attracts new customers

for loans (1)

• higher interest rates on savings (1) attracts more

customers to save (1)

• make loan conditions easier (1) e.g. lend to people with

lower incomes / give longer to repay (1)

• improve / increase range of services (1) e.g. offer

insurance / bank cards with added benefits (1)

• increase accessibility (1) e.g. by opening more

branches or increasing range of internet banking (1)

• advertising (1) may increase brand awareness (1).

© Cambridge University Press & Assessment 2024 Page 22 of 24

0455/23 Cambridge IGCSE – Mark Scheme October/November 2024
PUBLISHED
Question Answer Marks Guidance

5(c) Analyse the possible causes of a fall in a country’s 6

foreign exchange rate.

Coherent analysis which might include:

• a central bank / government may reduce a fixed

exchange rate (1) leading to devaluation of a currency
(1) in order to correct a balance of payments deficit (1)

• a central bank/government may try to reduce a floating

exchange rate (1) by decreasing the interest rate (1) or
selling the domestic currency (1)

• increase in the supply of the currency (1) due to

increase in imports (1) increased investment in other
countries / higher interest rates abroad (1) expectation
that the exchange rate will fall (1)

• reduction in demand for the currency (1) due to a

decrease in exports (1) fall in the rate of interest (1)
decrease in money sent home by country’s people
working in other countries (1).

© Cambridge University Press & Assessment 2024 Page 23 of 24

0455/23 Cambridge IGCSE – Mark Scheme October/November 2024
PUBLISHED
Question Answer Marks Guidance

5(d) Discuss whether or not a cut in the interest rate will 8

reduce inflation. Level Description Marks

3 A reasoned discussion which accurately 6–8

In assessing each answer, use the table opposite.
examines both sides of the economic
argument, making use of economic
Why it will reduce inflation:
information and clear and logical analysis
to evaluate economic issues and
• may reduce firms’ costs of production
situations. One side of the argument may
• may increase investment have more depth than the other, but
• may result in total (aggregate) supply increasing more overall both sided of the argument are
rapidly than total (aggregate) demand considered and developed. There is
• reduce cost-push inflation thoughtful evaluation of economic
• increased imports lowering total (aggregate) demand concepts, terminology, information and/or
• reduce demand-pull inflation. data appropriate to the question. The
discussion may also point out the
Why it will not reduce inflation: possible uncertainties of alternative
decisions and outcomes.
• may increase consumer spending
• reduced return from saving / less saving 2 A reasoned discussion which makes use 3–5
• reduced cost of borrowing / more borrowing of economic information and clear
• increase total (aggregate) demand analysis to evaluate economic issues and
• increase demand-pull inflation. situations. The answer may lack some
depth and development may be one-
sided. There is relevant use of economic
concepts, terminology, information and
data appropriate to the question.

1 There is a simple attempt at using 1–2

economic definitions and terminology.
Some reference may be made to
economic theory, with occasional
understanding.

0 A mark of zero should be awarded for no 0

creditable content.

© Cambridge University Press & Assessment 2024 Page 24 of 24