Q2

Part a: A better way of starting part is to name all the factors in the first sentence rather than write

“there are many factors that can influence demand”. A better alternative would be “People’s

income level, the prices of substitutes, and consumer preferences are all factors that influence

consumer’s demand” and then have 1-3 sentences describing each one and why it can shift the

demand curve left or right. Your usage of PES to explain the difference between short and long

run effects is excellent, no changes needed there.

Part b: There is a large structural problem. IN your first paragraph after you say “producing cars

for the following reasons…” you start going into definitions for several sentences without actually

telling us those reasons. Take the information you wrote in the following paragraph in the first

sentence starting with “The use of PED can help a firm producing cars [because] when the PED is

relatively low, the firm can raise the price in order to raise their total revenue”. None of what

you’ve written is “wrong”, just very poorly structured and difficult to follow, which does matter in

AS economics essays and can result in lost points. The part about why YED is perhaps not very

useful is perfect, no changes needed.

As written, 7/8 and 10/12.

Q3

Part a. Your line of reasoning is correct, but I’d like you to be more specific. In particular,

“Government may decide to increase the direct provision for it since they may be too

expensive…” add some details. For instance, we could say “They are too expensive for the
poorest citizens to afford and the ethics of that society dictate that everyone deserves access to

food/housing/education” or “They are too expensive for the poorest citizens, but their

consumption tends to have positive effects on society overall so it is a net benefit for governments

to provide these things directly”. It doesn’t matter how you rationalize it, as long as you’re being

specific.

I don’t like the way you’ve described the consequences of maximum prices; I’d omit any

discussion of maximum prices entirely unless you’re willing to spend a lot of time writing in

exhaustive detail about exactly why and how this results in further inefficiencies.

Furthermore, your discussion of why subsidies might not be effective is somewhat lacking; in fact

bureaucracy is rare in the private sector and a much simpler reasoning of “it’s almost expensive as

directly providing the good but doesn’t give government control over equilibrium quantity or price

to ensure that the poorest citizens can afford the good” might be a more effective approach.

Discussion about why subsidies might create complacency or long-run inefficiency could also be

appropriate, but that’s going to require a whole lot of writing.

Part b:

Good overall and only one change is required. You should discuss the long-run implications as

well (firms incentivized to leave the industry and go do something else leading to “chronic

undersupply”).

As written, 6/8 and 10/12

Question 2
 Part a: You’re going to need to discuss other factors that can also shift the demand curve for a

product; focusing solely on the prices of substitutes isn’t enough. Also mention income, consumer

preferences, etc.

Your explanation for short run and long run is also somewhat unclear and inaccurate. Rather than

saying that there are “different factors for shifts in the demand curve in short run and long run”,

we’d rather focus just on the short and long run results of a given price change. Your usage of

substitutes here is accurate, but just needs to be reframed to something like this: “Consumers are

more responsive to price changes over the long run compared to the short run because the

availability of substitutes is higher in the long run and we allow consumers more time to change

their habits”

Part b.

Very well written. There is one part that is very unclear. This sentence “With the competitive

market, people can easily switch the idea to other cars, so that PED can help the producers to

indicate”. I’m not sure what this sentence even means; the verb “indicate” is used improperly

here and you probably meant another verb.

As written, these would earn 5/8 and 11/12 respectively.

a. Don’t start with classifications of taxes; the question is asking for reasons why governments use
taxes in the first place and whether indirect taxes or direct taxes are “fairer”, so our first sentence

should start with “Governments impose taxes in order to…” and then “an increase in direct taxes

is fairer than an increase in indirect taxes because…”

Start discussing the classifications of taxes after these two sentences.

You mention that governments usually impose taxes to raise revenue, but recall they also

impose taxes to discourage consumption of some goods (which you mention later, this is fine

as you’ve done it) or to reduce the consumption of imports to encourage the consumption of

more domestically produced goods. You can rely on IGCSE concepts like negative

externalities here if you wish, but it is not required and you won’t be penalized for not

mentioning externalities as another motivation for taxation.

Your wording when describing what a progressive tax means needs to be more precise.

“Income taxes are mostly progressive taxes, which means the tax increases as people’s income

increases” This is unclear and inaccurate. To see why, imagine a society with a proportional

tax (flat tax in American English) of 15%. Somebody who makes 100k usd/yr pays $15k

usd/yr in tax, while somebody who makes 50k usd/yr pays 7.5k in taxes. In this scenario, as

the income increases, the tax also increases which fits the definition you’ve given for a

progressive tax. We need to mention specifically that the percentage of income paid in tax or

the tax RATE increases, not “the tax increases”, this is unclear and can easily apply to

regressive or proportional taxes as well.

Your explanation of sales taxes and why they are regressive is good.
The last area of improvement I’d like to see here is a reframing of what “fairness” even

means; this is ultimately a subjective/normative concept and some commentary on why

progressive-ness of a taxation system could widely be considered more ‘fair’ (simply because

people with a higher ability to pay should pay more because it will affect their living standard

less is an adequate explanation).

Part b:

You’ve started off good with a very direct answer to the question. This sentence is

unclear/meaningless as written however “…with a balanced budget, there could be less

factors influencing the prices” Re-write this to express what you mean more clearly or just get

rid of it entirely.

The rest of part B is overall well written but could use a little more focus and relation back to

the central idea that a balanced budget might sometimes prevent policy interventions to

alleviate inflation or recession.

As written, 4/8 and 10/12

Question 5

Part a

“Most of the time, a government would choose an import tariff instead of an import quota as a
tool of protection in international trade since they can actually earn tax revenue…” put this

sentence first, then follow it with your definitions as you’ve written them. Other than that, no

changes needed really. 8/8

Part b

This question is very difficult for Chinese students because they are generally far more

oblivious to international politics than students in other countries. You’ve done okay with the

knowledge you have and have given a main point (comparative and absolute advantage aren’t

totally sufficient to describe real world patterns), but your support for this point is not quite

adequate. Other things we could possibly mention besides just transaction costs are

protectionism, geo-political events and tensions changing patterns in international trade rather

than just being motivated by economic growth, the inability to quantify the damage done by

job losses, the fluidity of cost and opportunity cost over time in reality, variation in foreign

exchange rates, and the uneven distribution of income gains from international trade (along

with potential income losses) potentially changing what countries desire with regard to free

trade. These are not really things we go over in class partially because most of the examples

related to China are sensitive/censored and most of my students barely know what most

countries outside of Asia actually are.