wec11-01-rms-20250306
wec11-01-rms-20250306
January 2025
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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
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
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)
(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
Application
Analysis
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
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)
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.
(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.
(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)
Application
Up to 2 marks for application:
(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
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.
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.
Indicative content
13 Quantitative skills assessed