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The document is a mark scheme for the Pearson Edexcel International Advanced Level in Economics, specifically for Unit 1: Markets in Action, dated January 2025. It provides guidelines for examiners on how to assess candidates' responses, including marking principles and specific questions with their corresponding answers and marks. The document also includes information on Pearson's qualifications and its commitment to education.

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0% found this document useful (0 votes)
53 views25 pages

wec11-01-rms-20250306

The document is a mark scheme for the Pearson Edexcel International Advanced Level in Economics, specifically for Unit 1: Markets in Action, dated January 2025. It provides guidelines for examiners on how to assess candidates' responses, including marking principles and specific questions with their corresponding answers and marks. The document also includes information on Pearson's qualifications and its commitment to education.

Uploaded by

raffu532
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Mark Scheme (Results)

January 2025

Pearson Edexcel International Advanced


Level In Economics (WEC11)
Unit 1: Markets in action
Edexcel and BTEC Qualifications

Edexcel and BTEC qualifications are awarded by Pearson, the UK’s largest awarding body.
We provide a wide range of qualifications including academic, vocational, occupational and
specific programmes for employers. For further information visit our qualifications
websites at www.edexcel.com or www.btec.co.uk. Alternatively, you can get in touch with
us using the details on our contact us page at www.edexcel.com/contactus.

Pearson: helping people progress, everywhere

Pearson aspires to be the world’s leading learning company. Our aim is to help everyone
progress in their lives through education. We believe in every kind of learning, for all kinds
of people, wherever they are in the world. We’ve been involved in education for over 150
years, and by working across 70 countries, in 100 languages, we have built an international
reputation for our commitment to high standards and raising achievement through
innovation in education. Find out more about how we can help you and your students at:
www.pearson.com/uk

January 2025
Question Paper Log Number P78461A
Publications Code WEC11_01_2501_MS
All the material in this publication is copyright
© Pearson Education Ltd 2025
General Marking Guidance

• All candidates must receive the same treatment. Examiners


must mark the first candidate in exactly the same way as they
mark the last.
• Mark schemes should be applied positively. Candidates must
be rewarded for what they have shown they can do rather
than penalised for omissions.
• Examiners should mark according to the mark scheme not
according to their perception of where the grade boundaries
may lie.
• There is no ceiling on achievement. All marks on the mark
scheme should be used appropriately.
• All the marks on the mark scheme are designed to be
awarded. Examiners should always award full marks if
deserved, i.e. if the answer matches the mark
scheme. Examiners should also be prepared to award zero
marks if the candidate’s response is not worthy of credit
according to the mark scheme.
• Where some judgement is required, mark schemes will
provide the principles by which marks will be awarded and
exemplification may be limited.
• When examiners are in doubt regarding the application of the
mark scheme to a candidate’s response, the team leader must
be consulted.
• Crossed out work should be marked UNLESS the candidate
has replaced it with an alternative response.
Section A
Question Quantitative skills assessed Answer Mark
1 QS9: Interpret, apply and The only correct answer is B
analyse information in (1)
written, graphical, tabular A is not correct because this is an
and numerical forms advantage of a free market economy
C is not correct because a free
market economy does not have
government intervention
D is not correct because a free
market economy is likely to result in
an unequal distribution of income

2 QS4: Construct and The only correct answer is A


interpret a range of (1)
standard graphical forms B is not correct because the
minimum price is above the
QS9: Interpret, apply and equilibrium price resulting in excess
analyse information in supply
written, graphical, tabular C is not correct because the
and numerical forms increase in price will result in a
decrease in consumer surplus
D is not correct because the
minimum price is likely to result in
an increase in producer surplus

3 QS9: Interpret, apply and The only correct answer is D


analyse information in (1)
written, graphical, tabular A is not correct because moral
and numerical forms hazard is a market failure
B is not correct because this is not a
function of money
C is not correct because this is a role
of the government/central bank
4 QS4: Construct and The only correct answer is C
interpret a range of (1)
standard graphical forms A is not correct because the gain
QS9: Interpret, apply and would be 42 consumer goods
analyse information in B is not correct because the gain
written, graphical, tabular and would be 30 consumer goods
numerical forms D is not correct because the gain
would be 28 capital goods
5 QS4: Construct and The only correct answer is B
interpret a range of (1)
standard graphical forms A is not correct because renewable
QS9: Interpret, apply and resources generated 39% which is
analyse information in less than 50%
written, graphical, tabular C is not correct because non-
and numerical forms renewable resources generated 61%
of electricity
D is not correct because renewable
resources generated 39% of
electricity
6 QS8: Make calculations of The only correct answer is D
elasticity and interpret the (1)
result A is not correct because there is no
QS9: Interpret, apply and information on the income elasticity
analyse information in of demand
written, graphical, tabular B is not correct because there is no
and numerical forms information on the income elasticity
of demand
C is not correct because
complements have a negative XED
Section B
Question In 2023 the Government of France considered imposing an indirect tax Mark
on aviation fuel for those using private jets. This was to be set at a
rate of €0.65 per litre.
Draw a diagram to illustrate the impact of imposing an indirect tax on
aviation fuel for private jets.

Answer
7 Knowledge 1, Application 3
Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.

Knowledge

1 mark for showing knowledge on diagram


• Original supply and demand and correctly labelled axis (1)

Application
Up to 3 marks for the following information included on diagram:
• Original equilibrium price and quantity labelled (1)
• Leftward shift of supply (not pivot) (1)
• New equilibrium following a shift (not pivot) (1)

NB Award maximum 2 marks if the supply curve is pivoted


Accept other reasonable axis labels

(4)
Question Explain one reason why there might have been a housing market Mark
bubble in Australia in 2021.
Answer
8 Knowledge 1, Application 1 Analysis 2
Quantitative skills assessed:
QS2: Calculate, use and understand percentages, percentage
changes and percentage point changes.
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge

1 mark for understanding of ‘market bubble’:


• A period where prices rise rapidly/ where prices are above
their true/intrinsic value/ an adjustment may lead to rapid
price reductions (1)

Application

1 mark for reference to data:

• Prices rising rapidly in 2021 24.5%/


Price fell rapidly 2022 -4.9% (1)

Analysis

Up to 2 marks for linked analysis:

• Speculators (1) buying houses in the hope that their value


will increase/ so that they can sell them for profit later (1)
• Very low interest rates (1) causing more demand/people to
purchase houses (1)
• Consumer exuberance/overconfidence (1) meaning they
are willing to pay prices above the value of the house (1)
• Excess demand for houses (1) as demand far outstrips the
supply of housing (1)
• Shortage of supply of housing (1) resulting in prices being
bid up substantially by many buyers (1)
• Poor lending decisions by bankers/banks (1) may result in
borrowers with poor credit history/no deposit adding to
demand for housing (1)
• Large increase in immigration (1) may lead to increased
demand for housing (1) (4)
Question With reference to the information given, explain the difference Mark
between the rationing function and the incentive function of the price
mechanism.

Answer
9 Knowledge 2, Application 2
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge
1 mark for definition of rationing function e.g.:
• When a resource is scarce its price rises which discourages
demand/ where a price rise will result in a contraction of
demand (1K)
1 mark for definition of incentive function e.g.
• A price rise creates an incentive for firms to provide the
good/ higher prices generate more profit so firms extend
supply (1K)

Application
1 mark for applying stem to rationing e.g.:
• The rising price of cotton results in rationing to those most
able to afford (1AP)
1 mark for applying stem to incentives e.g.:
• The rising price of cotton t-shirts would create an incentive to
produce more/
• Farmers switched to growing wheat for animal feed as there
was an incentive for higher profit (1AP)
(4)
Question Ceteris paribus, calculate the income elasticity of demand for bus Mark
journeys.
Show your workings.

Answer
10 Knowledge 1, Application 3
Quantitative skills assessed:
QS8: Make calculations of elasticity and interpret the result.
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms

Knowledge
1 mark for definition
Responsiveness of quantity demanded to a change in income

/the formula of income elasticity of demand


% change in quantity demanded
% change in income (1)

Application
Up to 3 marks for calculations:
• % change in number of bus journeys
3.4-2.9/2.9 x 100 = 17.24137931% (1)
• % change in income
663-626/626 x 100 = 5.91054313% (1)
• YED calculation
17.24137931% ÷ 5.91054313%
= 2.917054986 (1)

NB: if correct answer (e.g. 2.9/2.92/2.917) is given, award


full marks regardless of working.
Accept reasonable rounding from full calculation (e.g. 17/6=
2.833)
Award the mark for 0.172 and 0.0591 where they have not
multiplied by 100 for the % change in number of bus
journeys or % change in income
Award 3 marks for 2.92%
(4)
Question Between 2019 and 2022 the number of international visitors to Mark
Czechia decreased from 6.8 million to 4.5 million.
Ceteris paribus, explain the likely impact on the producer surplus in
the hotel market in Czechia.
Illustrate your answer with a supply and demand diagram.

Answer
11 Knowledge 1, Application 1, Analysis 2
Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge
1 mark for definition of producer surplus e.g.:
• Producer surplus is the difference between the amount a
producer is willing to sell a good for and the price they actually
receive/ shown by the difference between the supply curve and
the market equilibrium price (1)

Application
1 mark for inwards/leftwards shift of demand (1)

Analysis
Up to 2 marks for showing the change in producer surplus
• Producer surplus decreases (1) by BCPeP1 (1)
Or
• Original producer surplus ACPe (1) and New producer surplus
ABP1 (1) (4)
Section C
Question Define the term ‘forward market’. (Extract A, line 10) Mark

Answer
12 (a) Knowledge 2
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.

1 mark for understanding of future price e.g.


• Priced in advance/
• At a future date/for future delivery (1)

1 mark for understanding of the following e.g.:


• Buyer and seller set an agreed price/
• For a commodity/gold/copper/foreign exchange/
• The forward market price for cocoa for 6 months’ time more
than doubled (1)

(2)
Question With reference to Figure 1 and Extract A, analyse one supply factor Mark
and one demand factor that caused the price of cocoa to increase by
approximately 68% between November 2022 and November 2023.

Illustrate your answer with a supply and demand diagram.


Answer

12 (b) Knowledge 2, Application 2, Analysis 2


Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.
Knowledge
Up to 2 marks for the diagram showing:
• Original supply, demand and equilibrium price and quantity (1)
• New equilibrium quantity and increased price having shifted both
demand and supply (1)
Analysis
1 mark for one supply factor from Extract A:
• Côte d’Ivoire 36.3% decrease in production /
• Caused by swollen shoot disease on cocoa farms /
• Flooding (1)
1 mark for one demand factor from Extract A:
• More cocoa has been required by the chocolate and drinking
chocolate markets /
• There is growing evidence of the health benefits of cocoa so
chocolate makers and drinking chocolate makers have been
increasing the cocoa content in their products (1)
Application
Up to 2 marks for diagram or for reference to Figure 1.:
• Shift supply to the left (1)
• Shift demand to the right (1)
• Figure 1- price rises from approximately $2.40 to $4.04 per kg
between November 2022 and November 2023 (1)
Supply and demand shift size may vary

(6)
Question With reference to Figure 2, explain the term ‘price inelastic Mark
supply’. Refer to the short-run and the long-run in your answer.
Answer
12 (c)
QS8: Make calculations of elasticity and interpret the result.
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.

Knowledge 2 Application 2

Knowledge
1 mark for understanding of price inelastic supply:
• where the PES is between 0 and 1/a change in price causes a
less than proportionate change in quantity supplied (1)

1 mark for understanding PES in the short-run and the long-run:

• More inelastic in the short-run/less inelastic in the long-run/


becomes more elastic over time/ inelastic in both the short-run
and long-run (1)

Application
Up to 2 marks for application:

• Short-run PES +0.07 (1)


• Long-run PES +0.57 (1)

(4)
Question With reference to Extract C, examine two effects of the Government Mark
of Ghana’s decision to end the subsidies paid to cocoa farmers.
Answer
12(d) QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms
Knowledge 2, Application 2, Analysis 2, Evaluation 2

Knowledge and Analysis


Up to 2 marks for identifying two effects and up to 2 marks for linked
explanations, e.g.:

• Farmers will be discouraged from growing cocoa (1K) as the


removal of the subsidy increases costs of production (1AN)
• Decreased cocoa output (1K) may result in decreased
employment in the sector (1AN)
• Reduces use of fertiliser as output decreases (1K) helping to
reduce external costs (1AN)
• Higher cocoa prices (1K) will result in decreased consumer
surplus (1AN)
• Diagram showing the correct leftward shift in supply (1K) and
the impact of removing the subsidy on equilibrium
price/quantity (1AN)
• Farmers will reduce investment (1K) as less funds available
for research and development (1AN)
• Reduced opportunity cost (1K) as the funds can be used to
pay for e.g. healthcare or education (1AN)

Application
Up to 2 marks for application to Extract C
• Spent $200 million in 2019/ $400 million in 2020 (1AP)
• To allow farmers to purchase fertiliser (1AP)
• To ensure that farmers’ incomes are not too low (1AP)
• The Government found it difficult to fund these payments
(1AP)

Evaluation
Up to 2 marks for evaluative comments (2+0 or 1+1), e.g.:
• $400 million subsidy removed could cause a substantial fall in
consumer surplus/producer surplus (1+1)
• Farmers may be dependent on the subsidies resulting in a
substantial problem for farmers when their income from the
subsidy falls (1+1)
• Removal of subsidy might promote investment as a means of
increasing productivity and reducing costs (1+1)
• Impact depends on PED for cocoa – if inelastic then price rise
will be greater than if elastic (1+1) (8)
Question With reference to Extract B, discuss the likely external costs associated with
cocoa production.
Illustrate your answer with an externalities diagram.

Indicative content
12(e) Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates
may make but this does not imply that any of these must be included. Other
relevant points must also be credited.
Quantitative skills assessed
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge, Application and Analysis (8 marks) – indicative content

• External costs- negative impacts on third parties


• Cocoa farming has resulted in large areas of rainforest to be lost. Over
the last 3 decades 70% of the forests in Ghana and Côte d’Ivoire is
attributed to cocoa farming- reducing habitats for animals, reducing
biodiversity, reducing amount of CO2 taken out of the atmosphere
resulting in global warming- rising sea levels- flooding
• Pesticide use increased 20% between 2014 and 2019 in Ghana and Côte
d’Ivoire. The pesticides used are often highly hazardous and may cause
cancer. The pesticides often end up in drinking water sources and rivers
resulting in additional healthcare costs for the government
• Children employed in cocoa farming - increased from 5% to 24% in
Ghana and Côte d’Ivoire- negative impacts on the child, their education
and life prospects- the economies of Ghana/Ivory Coast will have lower
prospects for economic growth
External costs diagram
• Diagram showing MSC above MPC
• Qme above Qso shows overproduction
• Pme below Pso shows price paid is below social optimum
• Welfare loss triangle due to third-party impacts
NB Diagram required to achieve Level 3
Level Mark Descriptor
0 No rewardable material
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding
of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate
examples.
Descriptive approach, which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in
the answer.
Chains of reasoning in terms of cause and/or consequence are evident
but they may not be developed fully or some stages are omitted.
Level 3 7–8 Demonstrates accurate and precise knowledge and understanding of
economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context using relevant
examples which are fully integrated to address the broad elements of
the question.
Analysis is clear, coherent, relevant and focused. The answer
demonstrates logical and multi-stage chains of reasoning in terms of
cause and/or consequence.
Evaluation (6 marks) – indicative content
• Magnitude- a wide range of significant external costs
• 70% of forests lost- a significant impact
• Private and external benefits may offset the external costs
• Difficult to measure the size/value of external costs
• The effects of external costs may not be noticeable in the short-run and
only emerge in the long-run
• 5% to 24% child labour shows an increasing problem generating larger
external costs
Level Mark Descriptor
0 No rewardable material.
Level 1 1–2 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 3–4 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 5–6 Evaluation recognises different viewpoints and/or is critical of the
evidence.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.
Section D

Question In 2015 the Government of South Korea introduced a tradeable pollution permit
scheme. This scheme applies to 70% of all businesses and includes power generation,
manufacturing and domestic aviation.

Evaluate the possible benefits of introducing a tradeable pollution permit scheme.

Indicative content
13 Quantitative skills assessed

QS9: Interpret, apply and analyse information in written, graphical,


tabular and numerical forms.

Indicative content guidance


Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates may
make but this does not imply that any of these must be included. Other relevant
points must also be credited.

Knowledge, application and analysis (12 marks) – indicative content

• Tradeable pollution permit scheme- selected firms in specific industries are


given a limit to the amount of pollution they can produce. These permits can
be bought or sold by firms in the scheme
• Affects 70% of all businesses, including power generation, manufacturing and
domestic aviation
• Firms have the incentive to reduce pollution in order to reduce costs
• Firms may develop cleaner technologies to be able to reduce pollution so that
they can sell surplus permits
• Firms that are able to sell permits can increase their revenues and producer
surplus/profit
• Firms that pollute at above their permitted level have to incur costs as they
need to purchase permits
• Each year the Government of South Korea can reduce the number of permits
available to be able to reduce carbon emissions/pollution
• Emissions from power generation, manufacturing and aviation will be reduced
• Reducing external costs- global warming, flooding, wildfires
• Profits and employment may fall versus companies not involved in the scheme
• Increased revenues resulting from more innovation- as businesses develop
ways to reduce pollution
• It creates an incentive for businesses to change their behaviour to be cleaner
to reduce pollution levels

N.B. Award a maximum of Level 3 if only one benefit is considered

Level Mark Descriptor


0 No rewardable material.
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding of
economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate examples.
Descriptive approach, which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Limited application of knowledge and understanding to economic problems in
context.
A narrow response or superficial, only two-stage chains of reasoning in terms
of cause and/or consequence.
Level 3 7–9 Demonstrates accurate knowledge and understanding of economic terms,
principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in the
answer.
Analysis is clear and coherent. Chains of reasoning in terms of cause and/or
consequence are evident but they may not be developed fully or some stages
are omitted.
Level 4 10– Demonstrates accurate and precise knowledge and understanding of
12 economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context using appropriate
examples which are fully integrated to address the broad elements of the
question.
Analysis is clear, coherent, relevant and focused. The answer demonstrates
logical and multi-stage chains of reasoning in terms of cause and/or
consequence.
Evaluation (8 marks) – indicative content
• Does not affect 30% of businesses
• 70% of businesses is substantial having large impact
• May be no significant impact on profits and employment
• Other methods to reduce pollution may be better e.g. An indirect tax might be
better as it raises funds for the Government to be able to correct issues
caused by pollution
• Government failure due to information gaps; if the government does not know
the correct number of permits to release
• If too many permits are issued, the secondary market price may fall, leading
to emissions remaining higher
• If too few permits are released businesses may have excessive costs to meet
the lower emission levels
• Government failure due to high administration costs of the scheme
• Government failure due to unintended consequences
• Domestic businesses may suffer when competing with foreign businesses
• Businesses might look to relocate to countries without tradeable pollution
permit schemes

Level Mark Descriptor


0 No rewardable material.
Level 1 1–3 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 4–6 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 7–8 Evaluation recognises different viewpoints and/or is critical of the evidence,
leading to an informed judgement.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.
Question Between 2012 and 2021 government spending on education per person
per year in high-income countries increased from $7 507 to $8 515. In low-income
countries the increase was from $42 to $56 per person.
Evaluate the microeconomic benefits of increased spending on education.
Indicative content
14
Quantitative skills assessed
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.
Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates may
make, but this does not imply that any of these must be included. Other relevant
points must also be credited.

Knowledge, application and analysis (12 marks) – indicative content

• Increased external benefits- positive impacts on third parties


o Individuals become more skilled- able to access better paid jobs, resulting
in more spending power that would result in increased demand for goods
and services
o More skilled workforce- means output per worker is higher – this will
benefit a business in terms of lower costs
o Higher income levels lead to more spending- tax revenue from indirect tax
will increase- increasing money available to provide public services/
healthcare
• Increasing production possibilities as each unit of labour is more skilled and
becomes more productive- PPF shifts right and the number of capital and
consumer goods that can be produced increases. Economic growth- increased
productive potential
• Businesses are able to produce more with the same amount of inputs so
output of firms/supply may increase- shifting supply to the right and creating
downward pressure on price
• Reduces market failure- where the market leads to an inefficient allocation of
resources- the result is greater efficiency as education is consumed at the
social optimum level
• Closing information gaps- where consumers or producers lack information to
make rational decisions
• Reducing incidences of asymmetric information- where one economic agent
has more knowledge than another- reducing the likelihood of producers
exploiting consumers or vice versa
• Private benefits achieved by consumers of education, such as developed
knowledge, improved skills, better job, higher pay, more utility from being
able to buy more/better goods

Level Mark Descriptor


0 No rewardable material.
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding
of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate
examples.
Descriptive approach which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Limited application of knowledge and understanding to economic
problems in context.
A narrow response or superficial, only two-stage chains of reasoning in
terms of cause and/or consequence.
Level 3 7–9 Demonstrates accurate knowledge and understanding of economic terms,
principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in the
answer. Analysis is clear and coherent. Chains of reasoning in terms of
cause and/or consequence are evident but they may not be developed
fully or some stages are omitted.

Level 4 10–12 Demonstrates accurate and precise knowledge and understanding of


economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context, using appropriate
examples which are fully integrated to address the broad elements of the
question.
Analysis is clear, coherent, relevant and focused. The answer
demonstrates logical and multi-stage chains of reasoning in terms of
cause and/or consequence.
Evaluation (8 marks) – indicative content
• Government failures- where the spending on education results in a net welfare
loss
• Information gaps mean the areas of education receiving funding are not
appropriate
• Unintended consequences- education spending may result in an increase in
supply of some workers and a decrease in supply in other areas
• Excessive administration costs- to implement more education spending more
needs to be spent administering it- if these costs exceed the extra funding to
schools then it is a government failure
• Opportunity costs- the cost of the next best alternative forgone- e.g. reduced
funding for healthcare
• The impact of education spending takes a long time before it affects
businesses as you have to wait for people to finish their education
• The increase in spending on education in low-income countries is just $14 per
person which may not have a significant impact/the increase in spending in
high-income countries is $1008 so is likely to have a more significant impact
• The increase in spending in low income countries is 33% and high income
countries 13%- so more impact in low income countries

Level Mark Descriptor


0 No rewardable material.
Level 1 1–3 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 4–6 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 7–8 Evaluation recognises different viewpoints and/or is critical of the
evidence, leading to an informed judgement.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.
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