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Title: Mark Scheme Paper 1 May 2019 A-Level Economics A
Description: Mark Scheme for Paper1 May 2019 A-level Economics A
Description: Mark Scheme for Paper1 May 2019 A-level Economics A
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Mark Scheme (Results)
Summer 2019
Pearson Edexcel GCE A Level
in Economics A (9EC0)
Paper 01 Markets and Business Behaviour
Edexcel and BTEC Qualifications
Edexcel and BTEC qualifications are awarded by Pearson, the UK’s largest awarding
body
...
For further information visit our
qualifications websites at www
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com or www
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Alternatively, you can
get in touch with us using the details on our contact us page at
www
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com/contactus
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Our aim is to help
everyone progress in their lives through education
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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
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pearson
...
Examiners must mark
the last candidate in exactly the same way as they mark the first
...
Candidates must be
rewarded for what they have shown they can do rather than be penalised for
omissions
...
•
All the marks on the mark scheme are designed to be awarded
...
e
...
Examiners should also be prepared to award zero
marks if the candidate’s response is not worthy of credit according to the mark
scheme
...
•
When examiners are in doubt regarding the application of the mark
scheme to a candidate’s response, a senior examiner must be consulted before
a mark is given
...
Question
Number
1(a)
Answer
Mark
Application 2
Price elasticity of supply calculation
% change in quantity supplied (28 268/134 612 x 100)
= 21% (accept range 20
...
4 (1) = 3
...
9
(Accept a range between 3
...
g
•
•
•
•
•
•
•
•
levels of spare capacity
stocks of finished goods and components
available e
...
bricks
time period and production speed
level of factor mobility/flexibility
availability of bricklayers, electricians etc
availability of land
planning permission/regulations
availability of technology/machinery to build
Explain as to the impact on price elasticity of supply (1)
e
...
•
limited availability of land/builders (1) so supply
will be inelastic (1)
(2)
Question
Number
2(a)
Answer
Mark
Knowledge 2, Application 2
Knowledge
• Supply and demand diagram annotated to show a
left shift in the supply curve (2)
Application
• New equilibrium price (1)
• New equilibrium quantity (1)
NB – Award up to 2 diagrammatic application marks for
other microeconomic effects based on correct
knowledge e
...
– changing Consumer Surplus (1) or
Producer Surplus (1) or Revenue (1) or Shortage (1)
(4)
Question
Number
2(b)
Answer
Mark
Analysis 1
The only correct answer is A
B is not correct because the potential output is not likely
to increase
C is not correct because A is more likely than C which
illustrates a reallocation of resources towards consumer
goods
...
B is not correct because companies merging are more
likely to benefit from internal economies of scale
D is not correct because a demerger will usually reduce
market share and it could be argued in this case that
the two businesses are unrelated
...
8 million – 14
...
5 million/1
...
4 million (1)
Calculation of total revenue in 2016
75
...
041 = 72
...
4 million
NB – simply stating 58
...
4 is 3 marks
(4)
Question
Number
5(a)
Answer
Knowledge 1, Analysis 1
•
•
•
•
•
•
•
Question
Number
5(b)
Mark
Resources are allocated via the price/market
mechanism/market forces of supply and demand/
the invisible hand of the market (1)
If there is an increase in demand prices rise to ration
the good (1)
Price changes act as a signal (1)
If there is a fall in supply prices rise to ration the
good (1)
Consumer sovereignty (1)
By privately owned firms (1)
Limited intervention by government/laissez-faire (1)
Answer
(2)
Mark
Knowledge 1
The only correct answer is D
A is not correct because Hayek promoted the idea of
private investment rather than government spending
B is not correct because Hayek was a critic of command
economies allocating resources, advocating instead the
many price signals in a free market economy
C is not correct because Marx was a critic of the free
market economy allocating resources
(1)
Question
Number
5(c)
Answer
Mark
Knowledge 1, Analysis 1
Knowledge
Identification of a benefit of division of labour (1)
• Less training needed
• Faster production process
• Greater output from given workforce
• Less time wasted moving between jobs
• Increased skill within specific role
• Increased efficiency
Analysis
Linked development (1)
e
...
A benefit is that the firm only needs to train
workers in one specific role (1k) this means that they
can lower costs (1an)
(2)
Question
Number
6(a)
Answer
Mark
Knowledge 1, Application 2, Analysis 2
Knowledge and Analysis: (up to 3 marks)
• Understanding of a positive statement e
...
statement
of fact that can be tested (1)
• Understanding of a normative statement e
...
statement containing a value judgement (1)
Further analysis of the difference (1) e
...
• a positive statement is not linked to political
viewpoint
• these normative statement represents the value
judgement of the Prime Minister/current political
party
• objective v subjective
• Scientific method
Application: up to 2 marks 1 for positive and 1 for
normative for each example from the extract
Normative example (up to 1 mark)
• the regulator ‘should’ limit the standard
variable tariff (1)
• offer fairer prices for customers who are
paying too much (1)
• ‘a price cap will not be good for consumers’
(1)
• The market is broken (1)
Positive example (up to 1 mark)
• Energy bills of 11 million households will be
capped (1)
• Save households up to £100 (1)
(5)
Question
Number
6(b)
Answer
Mark
Knowledge 2, Analysis 2, Application 2,
Evaluation 2
Knowledge/understanding: 2 marks for identification
of two likely benefits to the consumers (1+1) e
...
• Lower prices
• Improved product quality
• More innovative products
• Better customer service
• Better bundles/packages/choice
Analysis: 1 mark for linked explanation of each
identified benefit (1+1) e
...
• A benefit to the consumer is cheaper prices (1K)
as BT has greater purchasing power (economies
of scale) OR consumers can buy more
goods/services with their income OR increased
consumer surplus (1An)
• A benefit to the consumer is the greater
availability of bundles/packages (1K) this
therefore means that they can spend less overall
when buying products together rather than
individually on separate contracts(1An)
Application: 2 marks for reference the context of the
BT and EE takeover (1+1), e
...
• Multi-brand strategy (1)
• Mix of BT, EE and Plusnet services (1)
• Greater value bundles of services (1)
• Compete for their business (1)
• Controlling 35% of market share (1)
Evaluation: 2 marks for two evaluative comments,
OR 2 marks for identification and linked development of
one evaluative comment e
...
• Potential problems to the consumer
o Higher prices in the LR due to
diseconomies/monopoly power/xinefficency
o Lack of choice as control 35% of market
o Restriction of new competitors
o Slowed pace of technology
o Poor customer service
• Depends on the actions and behaviour of rival
firms
• Depends on the extent to which cost saving
measures are passed on to the consumer
• Depends on the degree of future regulation within
the industry
(8)
Question
Number
6(c)
Indicative content
Mark
Knowledge 2, Application 2, Analysis 2
Information gaps as main cause of consumers
failing to switch
Consumers lack market information on the price
of their landline bill in relation to other providers
Main target audience (the elderly) lacks the
knowledge to shop around online and use price
comparison sites
Switch to online billing and direct debit payments
means many households are unaware
Automatic price changes made by BT
Hard to compare prices as all bundles comprise of
different services
Lack of awareness of competitor prices and
packages
Irrational behaviour as main cause of consumers
failing to switch
Computation issues e
...
consumers do not
understand their pricing structure
Habitual behaviour/status quo bias/brand loyalty
e
...
consumers may have a tendency to purchase
the same service over time
Consumers do not have the time to shop around
or look for better deals
Consumers want to avoid the disruption of
changing provider
Strong brand of BT leading to an inelastic demand
Other factors could be causing this:
Misleading advertising or price plans
Lack of provision in all areas e
...
fibre optic or
bundles
Tie in contracts & automatic renewals
Information overload
Size of savings may not be significant enough to
go through switching
Line quality may vary so not similar
packages/non-price considerations make BT offer
the best
...
NB There may be overlap between information
gaps and irrational behaviour as reasons
...
Displays isolated or imprecise knowledge and understanding
of terms, concepts, theories and models
...
Descriptive approach which has no link between causes and
consequences
...
Applies economic ideas and relates them to economic
problems in context, although does not focus on the broad
elements of the question
...
Demonstrates accurate knowledge and understanding of the
concepts, principles and models
...
Economic ideas are applied appropriately to the broad
elements of the question
...
g
...
Level 1
1–2
Identification of generic evaluative comments without
supporting evidence/ reference to context
...
Level 2
3–4
Evaluative comments supported by relevant reasoning and
appropriate reference to context
...
Question
Number
6(d)
Indicative content
Mark
Knowledge 2, Application 2, Analysis 4
BT profit levels have risen to £3
...
g
...
g
...
(8)
Level
Mark
Level 1
0
1–2
Level 2
Level 3
Question
Number
6(d)
continued
A completely inaccurate response
...
Use of generic or irrelevant information or examples
...
3–5
Displays elements of knowledge and understanding of
economic principles, concepts and theories
...
A narrow response; chains of reasoning are developed but
the answer may lack balance
...
Ability to link knowledge and understanding in context using
relevant and focused examples which are fully integrated
...
The answer
demonstrates logical and coherent chains of reasoning
...
Level 1
Mark
0
1–2
Level 2
3–4
(4)
Descriptor
No evaluative comments
...
No evidence of a
logical chain of reasoning
...
Evaluation recognises different viewpoints and/or is critical of
the evidence
...
g
...
NB for a Level 3 response there must be reference
to the context of utilities
...
NB for a Level 3 response a diagram is not
required but may include for example
Mark
Improved allocative efficiency for consumers, surrogate
for competition
...
Displays isolated or imprecise knowledge and understanding
of terms, concepts, theories and models
...
Descriptive approach which has no chains of reasoning or
links between causes and consequences
...
Applies economic ideas and relates them to economic
problems in context, although does not focus on the broad
elements of the question
...
Demonstrates accurate knowledge and understanding of the
concepts, principles and models
...
Economic ideas are carefully selected and applied
appropriately to economic issues and problems
...
Question
Number
6(e)
continued
Indicative content
Mark
Evaluation 6
•
•
•
•
•
•
•
•
•
•
Criticisms of the likely effectiveness of the policies
Awareness of the problems surrounding their
implementation
Recognition that a combinations of approaches
may be needed
Different industries may need differing
approaches
SR v LR implications
Regulatory capture
Asymmetric information
Regulatory lag
Irrational consumer behaviour
Unintended consequences of government failure
e
...
NB for a Level 3 response there must be reference
to the context of utilities
...
Identification of generic evaluative comments without
supporting evidence/reference to context
...
Evidence of evaluation of alternative approaches which is
unbalanced
...
Evaluative comments supported by relevant chain of
reasoning and appropriate reference to context
...
Question
Number
7
Indicative content
Mark
Knowledge 4, Application 4, Analysis 8,
Evaluation 9
•
•
•
Definition of a wage differentials
Recognition that labour is a derived demand
Use of labour market diagrams to show the reasons
for wage differentials
Likely reasons:
• Differing demand for labour
• Differing levels of supply of labour
• Compensatory reasons –
skills/qualifications/experience/region/productivity/age
• Public versus private sector workers
• Problem of a monopsony employer for certain workers
• Impact of trade union membership
• Impact of immobility of labour
• Impact of discrimination
• Use of elasticity of demand for labour
• Use of elasticity of supply of labour
• Current labour market issues – gig economy/zero
hours/austerity/gaps in employment for carers
NB – For Level 4 the candidate must refer to a specific
industry and the reasons for the wage differentials
that exist within it
...
Regulations/National Minimum Wage/unions/public
pressure reducing wage differentials
...
Level 1
1–4
Displays isolated or imprecise knowledge and understanding of
terms, concepts, theories and models
...
Descriptive approach which has no chains of reasoning or links
between causes and consequences
...
Applies economic ideas and relates them to economic problems in
context, although does not focus on the broad elements of the
question
...
Level 3
9–12
Demonstrates accurate knowledge and understanding of the
concepts, principles and models
...
Analysis is clear and coherent, although it may lack balance
...
Level 4
13–16
Demonstrates precise knowledge and understanding of the
concepts, principles and models
...
Analysis is relevant and focused with
evidence fully and reliably integrated
...
The answer demonstrates logical
and coherent chains of reasoning
...
Level 1
1–3
Identification of generic evaluative comments without supporting
evidence/reference to context
...
Level 2
4–6
Evidence of evaluation of alternative approaches which is
unbalanced leading to unsubstantiated judgements
...
Level 3
7–9
Evaluative comments supported by relevant reasoning and
appropriate reference to context
...
Question
Number
8
Indicative content
Mark
Knowledge 4, Application 4, Analysis 8,
Evaluation 9
•
•
•
Definition of collusion
Recognition of the concept of interdependence likely to
exist in an oligopolistic market structure
Identification of the format in which collusion may take
Likely reasons:
• Reduce the level of competition & the cost of direct
competition e
...
– marketing or price wars
• Increase revenue and joint profit maximisation
• Use of game theory and pay off matrix to show the
benefits of collusion v competition, e
...
NB for a Level 4 response, candidates must refer to a
specific INDUSTRY in their answer
...
g
...
Non-collusive reasons for price stability e
...
price
leadership
•
•
Arguments that it could bring benefits e
...
– the
survival of a declining industry/benefits to
consumers and others - This point can count as KAA
(25)
Knowledge, application and analysis
Level
Mark
Descriptor
0
A completely inaccurate response
...
Use of generic or irrelevant information or examples
...
Level 2
5–8
Displays elements of knowledge and understanding of economic
principles, concepts and theories
...
A narrow response or superficial, two stage chains of reasoning only
...
Ability to apply economic concepts and relate them directly to the
broad elements of the question with evidence integrated into the
answer
...
Chains
of reasoning are developed but the answer may lack balance
...
Ability to link knowledge and understanding in context using
appropriate examples
...
Economic ideas are carefully selected and applied appropriately to
economic issues and problems
...
Evaluation
Level
Mark
Descriptor
0
No evaluative comments
...
No evidence of a logical chain of
reasoning
...
Evaluative comments with supporting evidence/reference to context
and a partially developed chain of reasoning
...
Evaluation recognises different viewpoints and is critical of the
evidence provided and/or the assumptions underlying the analysis
enabling informed judgements to be made
...
Registered company number 872828
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Title: Mark Scheme Paper 1 May 2019 A-Level Economics A
Description: Mark Scheme for Paper1 May 2019 A-level Economics A
Description: Mark Scheme for Paper1 May 2019 A-level Economics A