What types of

Questions will I be
asked about this
topic?

Practice Makes Perfect: Extended

Responses in Economics Date: 12.11.14

"If you put the federal government in charge

of the Sahara Desert, in 5 years there'd be a
shortage of sand. (US Gov. management)
"The most important single central fact about
a free market is that no exchange takes place
unless both parties benefit.
Quotes from Milton Friedman was an extraordinary Nobel
Prize-winning economist whose ideas helped underpin modern
conservative economic theory. His contributions to economics
and the conservative movement cannot be underestimated

Learning objective:
Understand the
requirements for The
Markets in Action
examination
STARTER:
Name 4 areas that
should be in every
economics extended
response
What areas could you
consider to add
evaluation to your
extended responses?
How do the quotes
relate to our study?

LETS EVALUATE: What does evaluation look like?

Effectiveness of a policy: Questioning the extent to Equity effects of
which a policy tool will be effective e.g. price elasticity intervention: Questioning the
of demand will influence the efficacy of an indirect tax. fairness of a policy e.g. are indirect
taxes fair? The opportunity cost of a
subsidy.
Efficiency of a policy: i.e. does a particular
i.e. is a policy thought of as fair
intervention lead to a better use of scarce resources
or does one group in society
among competing ends? does it improve allocative,
gain more than another? For
productive and dynamic efficiency? For example example it is equitable for the
would introducing indirect taxes on high fat foods be
government to offer educational
an efficient way of reducing some of the external costs
maintenance allowances
linked to the growing problem of obesity?
(payments) for 16-18 year olds in
low income households to stay
Comparing options e.g. is a subsidy more effective
on in education after GCSEs?
than a tax.
Would it be equitable for the
government to increase the top
What the decision will depend upon: outside factors
rate of income tax to 50 per cent
in a bid to make the distribution
Sustainability of a policy: Short term v long term.
of income more equal?
Does a policy reduce the ability of future generations
to engage in economic activity? Inter-generational
equity is an important issue in particular on which

What is the best

option that the
government could
use to deal with
demerit goods?

What to include in your answer to an 18 mark

question

Marks are awarded for these questions based upon your level of response. There
are 4 levels
Level 1 (1 4) Knowledge e.g. accurate definitions of key words/terms (such as
those used in the question)
Level 2 (5 8) Application of knowledge/using knowledge whilst attempting to
answer the question e.g. explaining why an indirect tax on fatty foods might reduce
levels of Obesity. Using examples to show how the policy might be interested.
Level 3 (9 12) Analysis/using economic theory to explain something e.g. supply
and demand analysis (diagram which is explained) to explain why an indirect tax
might reduce levels of Obesity.
Level 4 Evaluation (13 18)
You cant access a higher level of marks unless you have achieved the levels below
it.

What is the best

option that the
government could
use to deal with
demerit goods?

Questions/topics set in past exams

Jan 09 - should the government subsidise food prices?

Jun 09 - are taxes the best solution for dealing with negative externalities?
Jan 10 should healthcare be provided by the public or private sector?
Jun 10 should taxes on petrol be reduced?
Jan 11 - is regulation the best way to deal with carbon emissions?
Jun 11 - are subsidies a good way to encourage the consumption of merit
goods/goods with positive externalities?
Jan 12 what is the best option for dealing with the problems created by
discarded chewing gum?
Jun 12 is regulation alone the best way to deal with the problems created by
fast food?
Jan 13 are subsidies to build affordable housing the best way to deal with the
housing shortage?

Should else could

the Government
do to deal with
this problem?
What do you
suggest?

Should
companies be
made to pay?

What signs are

there that litter
prevention
schemes are not
working?

How much are

the negative
externalities of
litter worth?

DIRTY
NATION

Does legislation
work?

What other
policies may
work?

Is it fair for
councils to pay?
What is meant by
unintended
consequences?
What examples
are there?

What other
problems does
litter cause?