Economics Marking Scheme Papper1

Mark Scheme revision economics Paper 1

Define 'market structure'.

- ANS The features of a market that affect the behavior and performance of firms

Define oligopoly –

ANS• A market dominated by a small number of large firms

Define the term 'market failure' –

ANS Misallocation of resources

Explain one ethical issue that may result from producers seeking to earn very high profits.

- ANS Producers may restrict consumer choice (1) leading to reduced satisfaction

Explain one role of a market –

ANS• Opportunity for buyers and sellers to interact

• Allocating scarce resources

Explain one way the main economic groups may interact with each other. –

ANS• Consumers (1) buying products from businesses (or businesses selling to consumers)

Explain what is meant by the basic economic problem

- ANS Scarce resources and unlimited wants • Choices must be made in the allocation of
resources

Explain why individuals must make economic choices. –

ANS Individuals have unlimited wants but limited funds to buy needs and wants

State two deductions from a worker's gross pay

- ANS• Income tax

• National insurance

State two factors that affect price elasticity of supply. – ANS

• Spare capacity

• Available stocks