Exam Guidance and Practice 1 _ WHAT YOU WILL LEARN “There are four assessment objectives or Key skills for the IGCSE in Economics. You wil be assessed on your: S ‘knowledge and understanding of economics analysis judgment and decision-making tical evaluation, ‘You wil be requited to take three examination papers and answer the following types of questions: + multiole choice questions (paper 1) ‘structured questions (paper 2) . ‘+ questions that test your skills of analysis and critical evaluation (paper 3) Inthissection youwillearm: = ‘techniques to help you answer muttiple choice questions and structured questions to rmaximize yout marks = whal examiners are looking for, how answers are marked and the differences between a grade A and a grade C. THE EXAMINATION WILL ASSESS YOUR SKILLS AND KNOWLEDGI OF ECONOMICS a You will be assessed on four key skills during the course of the examination. These are: KNOWLEDGE WITH | UNDERSTANDING ” ANALYSIS ‘+ identify economic facts, definitions, ‘+ select, organize and interpret data concepts, principles and theories apply your econarnic knowledge and understanding in writing, numbers, use economic vocabulary and terms diagrains, pictoral form and in graphs + use economic data, recagnize patterns in such data, and work out the econornic relationships they demonstrate. JUDGMENT AND DECISION-MAKING ® ‘+ distinguish between evidence and opinion, make reasoned judgments ‘and communicate them accurately and logically CRITICAL EVALUATION j + recognize that economic theory has © draw conclusions from economic various imitations and uncertainties Freier nd wiley evslite + evaluate the social and | economic data environmental implications of ‘= communicate your conclusions in a | re economic actions and ‘ logical and concise way | lecisions | RASS‘These skills will be assessed in three examination papers. The most important assessment objectives of each paper are shown in bold letters in the table below. must be answered 2 Structured ——-2hours 1 compulsory Ku 50% ‘questions ‘question from. A Section Aplus 1D a choice of 3 questions from Section B 3 Analysis Thourand 2 sets of questions KU 30% and Critical 30minutes basedondataon JD evaluation cconomicsituations A for you to interpret ce and analyse ‘Answers to the questions will be marked and papers graded A to G. The ‘grade you achieve will depend on how well you demonstrate the required skills in each paper. Grade A students must demonstrate excellence in the key skills and show mastery of the content of the IGCSE course in economics. Answers to hore icult questions should be outstanding and show a sound ability to draw conclusions from economic information. Grade € students must also dernonstrate a good understanding of the course content and some ably to answer the more dificult questions. Grade F students must demonstrate some familiarity with the main ‘economic issues and concepts covered in the course, They should be able to answer basic question: correctly and draw some basic conclusions PAPER 1: WHAT IS A MULTIPLE CHOICE QUESTION? You should already be familiar with multiple choice questions from the ten- minute tests at the end of Units 1, 2 and 3. ‘A multiple choice question requires you to choose an answer from four possible options. When you have decided on the correct response, indicate your choice on the answer sheet, Each right answer to a question is awarded cone mark. No marks are deducted for wrong answers. You have 45 minutes to complete 30 multiple choice questions in Paper 1. You must answer all the questions. This means you have 1.5 minutes on average to read and answer each question. However, some questions may take more time to read and answer than others.ANSWERING MULTIPLE CHOICE QUESTIONS ‘© Read through each question carefully. Some answers may be clear. Others may appear to have more than one right answer, but only one will be correct. * if you find some questions are difficult and taking you a long time to think through, then move on to the next question and return to the difficult ones later ‘© Carefully monitor time during the examination. Your teacher will start the exam and wil tell you when there is 5 or 10 minutes remaining. You should try to leave yourself at least 5 minutes towards the end of the exam to check your answers, + Ifyou are unsure of the answer to a question use a process of elimination. You have a 25% chance of getting an answer right in a multiple choice question. You can improve your chances by using your knowledge to quickly eliminate options that are clearly wrong or only partially right 1 An entrepreneur is someone who: Ye, but an do workers x ‘A. produces goods and services Ye, but not all ioms have X factoriee D. supervises other workers Yes. the best answer Sx This babour, A supervisor is 2 fecior worker or manager You now have 15 minutes to complete 10 multiple choice questions using the techniques you have learned in this section to help you, When you have finished, check your answers against those provided at the end of this book. How many did you get right? Make a note of any you got wrong and make sure you understand why before you go on to the next section. TOP TIP | Never leave a question unanswered © Unanswered questions ara no marks. So, if your time has almost run out, quickly mark an answer to any questions remaining Even if you have to guess you may still get some questions right and earn extra marks.A structured question is a series of related questions, often based on a sentence or short paragraph describing a real economic situation. Some questions may require short, one-word answers or a single sentence. Others will equire more detailed explanations. You are required to answer the structured question in Section A of Paper 2 and any three questions you select from a choice of six questions in Section B. On average you will have 30 minutes to complete each question. Here is an example of a structured question, The marks for each question will vary according to how much explanation is required in the answers. For example, short answers requiring a very brief definition or statement could earn you 1 or 2 marks. Questions that require longer answers to demonstrate all the key skill in economics will be awarded more marks, in some cases up to 8 or even 10 marks per answer. Paper 2 has a total of 80 marks. The marks for each set of questions will normally add to 20. arene IDENTIFYING WHAT EACH QUESTION REQUIRES In the structured question example above, notice how different words are used at the start of each question to tell you what to do, such as ‘identify’, ‘explain’ and ‘define’ The following words are commands or instructions cornmon to all structured questions, Each one requires you to answer a question in a different way to ‘test your core skills against the different assessment objectives. Examples of questions are provided. ©‘Scrutinize the information provided to ienty and describe economic oe outcome may ormey not occur Analyse the motives ee ‘Analyse what might have happened to profits i ins airlines: as a result of the problems stated.’ Calculate ee SEG ERS _ Becstye ee there are very large supermarkets.’ : ‘Discuss how fms might achieve arise in profits’Evaluate xpain Identify ‘Summarize | State ‘why... WSS SEE Draw out and classify the diferences between two or more economic features, terms or situations. ‘Distinguish between the private sector and public sector ‘of an economy” “Distinguish between a quota and a subsidy’ ‘Weigh up diferent possible answers or outcomes and judge which ones are more accurate or suitable. These questions usualy require analysing a statement about an economic situation or a set of data. ‘Evaluate the potential impact on a developing country - ‘of removing all barriers to trade.’ “Evaluate the potential impact af government subsi te wheat fermers in Japan on local food pices Cleary define and describe why and how an economic situation or outcome can occur. ‘pli, sing examples what meant by an ester cost! ‘Explain oe reduction in nye ‘might increase inflatior Find, state and explain the relevant economic terms, “concepts of measures. “deity tree ways of measuring whether an india ‘a country is large or small.” : a ‘dently the factors of production.” Provide a brief statement describing key economic «concepts or arguments “Summarize the main arguments forand: agaist fay -amarket economic system: “Summarize the key drivers of an cause? occupation,’ Clearly exptess economic facts or account au economic concept or situation, sat our ways in whieh muttnatonal campanies cn help developing countries ‘state the functions of a central bank.” Give reasons for an economic situation ot outcome ‘Why might a government increase employment opportunites?” “Why do exchange rates fluctuate?” kU 1D ez KU KU ¢ >aHOW TO ANSWER A STRUCTURED QUESTION oo —— : ‘| * Read the short paragraph or extract and each question slowly and in full i ane i Re-read them if necessary. Make sure you understand as much as you can? TOP TIP | about each question and what it is about before you start writing your P Learn and use examples answer. | Questions wil often ask * Underline all the key economic terms and concepts you can identify in the Yow to provide examples, short extract and each question, Such as ‘Explain, using i examples, what is meant * Note the command word in each question to identify what is expected E byam external cost: ven ifa question does not ask you for examples from your answer. * Look at the marks for each question to consider how long or detailed your it may still be worthwhile answer should be. The more marks there are, the more is expected, Providing some to rate your answer. * Before you start writing make any quick notes that you think will help you Reading newspapers and write your answers in full. f you run out of time and cannot complete your listening to business news | answers, you may pick up some marks on your notes if they show you isa good way to pick up have understood the question and what the answer requires. For example: | new examples and ideas Suggest how a firm could try to increase its profit. profit = revenues - costs increase revenues? increase consumer demand (from advertising, better product, cut pnce # demand price elastic) decrease costs? more efficient, merease mn scale ‘We will now apply these techniques to the structured question on page 60. A combination of excess supply, weak consumer demand and competition . from new channels such as the intemet has pushed prices down in shops for goods from clothing to electrical products = 2 Identify three causes of a change in the demand foragood, _{3] emer a = | pyre ree | See weenie oS career eee oe oe Sree eter ema. exolain whether the reasons ven | TOP TIP _in the above extract would lead tthe ated effecton pices, [7] Puta eitin your tate x : : : Some questions may look straightforward 7 marks requires detailed explanation and analysio, Excess readamitt ay ~ supply and weak clemand wil both tend to push prices z | is There wil always = down. Increasing competition between firms for consumer be arguments for and demand will also tend to reduce prices, $0 all the reasons ss = | against a particular © gwen will lead to a fall in prices. To gain maximum marks it proposal in a question | te useful to show these effects on a demand and supply | orwhy an economic © diagram, Increased competition will sift the market supply © situation may or may = eve to the nght. | norarise.A good answer will therefore challenge a statement or proposal mnade na question, and consider bot sides of an argument. This | ll demonstrate your judgment and critical | evaluation sll petrewtet meant by —— ne seaien g _ How Ie calcula eee y ~B) Acorrect definition will receive only | mark so keep it short. For example, “The responsweness of demand for a © good to changes in ts price’ The other 2 marks are for | an explanation or an equation showing how price elasticity <— of demand 15 calculated. eS a Discuss whether clothing and electrical products would be thal y 10 fave an dale ora Inelastic pice lasiciy-ol demand i For 7 marks a full discussion will be required, Start by explaining what 16 meant by elastic and nelastic price x a elasticity of demand, Then think about the factors that oS make demand price elastic ar elastic and relate them | to the two products, Some clothing will be a necessity, such a3 basic shows, vhirls or dresses, and some low cost items may be purchased reqularly, Demand for a such clothing will tend to be relatively pace inelastic, In = 4 - contrast, many electneal goods such as high definition - . TVs, are expensive but durable. Demand for them 15 Nkely 3 to be relatwely pce elaobe. S a However tor macmum marks you need to explain why Ehis may not be the case. For example, designer clothes and shoes, lke Guces and Arman, are hxury items ancl clemand 2 for them 19 hkely to be pace elastic. In contrast, radio and satelite navigation equipment may be necessities for people who operate ships and dnve trucks 50 they can listen to weather reports or find their position. Low cost electncal tems may also be relatively price melastic because they are affordable.MINUTE TEST You now have 30 minutes to answer the following structured question using all the techniques. ‘you have learned in this section. : a. Explain what is meant by a trade union fl State four non-wage influences on an individual’ choice of occupation. > fal Discuss the extent to which the relative strenaths of trade unions can influence the level ‘of eatnings in different occupations. fe) ‘An older skilled worker’ pattern of spending and saving is likely tobe different from that ‘of a younger unskilled worker. Discuss why. 8) ‘Adapted from Clé 0455 November ‘06 Paper 4.93 When you have finished writing your answers, compare them with the student answers and examiner's comments provided on the following pages. a Explain what is meant by a trade union. Qh Student answer [A trace union is an organized group of workers with 2 number of ams including defending employ nights and jobs, securing provements in working condktions, improving pay and other beneiits, developing and protecting the skills of members and encouraging firms to merease worker participation im decision-making, There are a vanety of different types of union including general unions representing workers from different occupations, mdystrial unions representitg workers in the same industry, craft: umons representing workers wth the same stills across diflerent mdustnes, and non-manual or professional associations. Examiner's comments The canchdate has correctly explamed trace union organizations and their main aims. The answer given Is however far too long for 2 marks, It also descnbes different types of trade unions. This 19 not required and wall earn no additonal marks. Some candidates however thought a trade union was 4 group of counties entermg mto trade agreements, Another common mistake was candidates suggesting employers organized trade unions, rather than workers. b State four non-wage influences on an individual's choice of occupation. {a Student answer There are many wage anc non-wage infvences on an mdudias chosce of accpation. Now-wace . influences include job satislachon, secunty, promotion prospects and werkng conditons, inlvaing ae the number of hours an employee Is required to work each week and whether these: tcl unsociable howrs. Indiaduals will respond to diferent wage and non-wage inflvences according to ther parbcular circumstances and preferences For example, 2 sigaihcant improvement im working conditions may attract a bigger supply of labour to an occupation.Examiner's comments ‘The candidate above has correctly idenbfied four non-wage mfluences for maximum marks. The statement: on the degree to which the indiadval responds to the different influences according to thee circumstance demonstrates knowledge and understanding, In the exam, some candidates included wage infivences in ther answer, anguing that higher wages attracted more people to an occupation, Although this statement is correct the question does, riot ask for wage factors and is awarded no marks. It 1s extremely mportant to always read the question carefully Discuss the extent to which the sete sents of trade Unions influence the level of ‘earnings in different occupations. (6) ‘Student answer The earnings af workers in 2 particular occupation will be determined by the demand for and supply of their labour The market wage rate for an occupation is shown as WI in the diagram where the demand for labour (Dl) equals the supply of labour (i). Wage rate ‘Quantity of tabour || A trade union can ncrease the wage rate if it 6 able to mcrease the demand for the workers tt represents or reduce ther supply Tacle umons ca wllvence the demand for labour positively through actions auch as training their members to increase ther skis and productuity. However, umons can also reduce demand for the: labour they represent i they contmwally disrupt production through strikes or other mdustrial actions, Employers may be forced to close down or employ non-union labour or more machinery instead of umonzed workers. in a closed shop all workers in a workplace or dustry mist belong to a trade uwon. This can restrict the supply of lsbour to an occupation. Bans on overtime and go-slows can also restrict labour supply This may force employers to raise wages to stop these industrial actions, A trade union must also represent 2 significant number of workers in a workplace or an entire mdustry to have strong bargaining power over wages. Ths will especially be the case where unions control the supply of critical services to people such as education, health and power supply. The financial resources avallable to the union (primaniy from membership fees) are also important and will enable ‘them to actively communicate with all ther members, call ballots for mdustnal actions and supportee Ss their comes dunng a stnke. Trade unions with few members and financial resources are less hkely to have signiicant bargaming power aver employers and wages compared to other ymons. ‘The supply of labour to an occupation can be influenced by trade unions through promoting the particular occupation, having 2 good reputation for supporting and protecting its members and negotiating good pay wereases. Examiner's comments ‘The answer 9 excellent and game top marks, The candidate correctly identifies all the factors which wil make one union relatively strong compared to another, mclucing whether the union represents all the workers in a firm or industry, the importance of the product they produce and the financial resources of the union, The candidate makes a very good start by arguing how a trade umon must influence labour clemand ancl supply conditions to influence the market wage for an occupation and uses a diagram to show thes, In the exam, many canchdates struggled with this question, Some wrote about the diferent methods: sed by trade unions to achieve their aims, such as caling a stnke or a go slow, but did not explain the circumstances in which these industrial actions will be @ powerful influence on employers and the wages they pay. Many sbudents also overlooked how trade unions can raise the shils and productinty of their members Lo increase the attractiveness of their labour to their employers, ‘An older skilled worker's jen elias likely to be different from, that ola perriee se led worker. So [8 Student answer || An individuals pattem of spending and saving 1s likely to be determined by a number of aifferent factors including age, income and tastes. Spending patterns change wth age, Older people tend to spend more on household goods, eg, fumishings, while younger people may spend more on items such as entertainment and fashion. Unsklled workers are likely to eam lower wages than shilled workers and therefore will tend to spend most of their disposable mcome to meet basic needs for food, clothing, hovsing and heating, Skilled workers wil eam higher wages and have the ability to spend far more on luxury items, leisure activities and other goods and services to satisly their wants, However, shiledi workers will be able to save more than an unskilled worker on lower wages, Older workers with higher incomes, more secure jobs and who are: also home-owners may also be able to borrow more money from banks than younger people on lower incomes. This will enable them to buy lwiury items like overseas holidays, 2 new car and Turniture, Older people may therefore spend more on loan repayments, In contrast, loan repayments may be at greater nsk from younger people whe have only recently started in work, earn relabwely low incomes and have no property to ofer 25 collateral or security against loans. Consequently, banks may be less inclned to olfer younger people loans. Older shiled workers are also more likely to understand the need to save money to fund their retirement. However, younger unskilled workers may be less willing to save money‘ e ‘Age and stil levels wll not be the only determutants of pattems of saving and spending, There are other important considerations including iMestyle and family status, For example, people may become more health conscious as they get older and may merease ther spending on health care products and exercise. An older worker may also be more likely to have & famiy than a younger person and wil spend money on goods and senaces thee chieren wll nea ‘and want, such 39 clothes, toys and education, Examiner's comments “The question requires students to analyse relationsinps between kil levels, age, mcomes and tastes, and examine their wflvence on patterns of spending and saving. These are weil covered by the || candidate. The answer earns top marks. The answer also cludes references to oldies workers mith higher incomes and property beng able to borrow more to fund their Mestyle choices and being more aware of the need to save to fund thew retirement. In the exam, some candidates focused solely on the influence of income or age on patterne of spending and saving and failed to earn maxmum marks, So, how good do you think your answers were compared to those of the student and the examiner's ‘comments? For each question, make @ note of where you may need to improve your answers. Revisit your notes if you encounter similar questions during practice exams,