Economics · 2001 · May · Paper 3 · HL · Markscheme

MARKSCHEME May 2001 ECONOMICS Higher Level Paper 3 13 pages M01/330/H(3)M INTERNATIONAL BACCALAUREATE BACCALAURÉAT INTERNATIONAL BACHILLERATO INTERNACIONAL Section A — Data Response Questions — Paper Specific Markscheme Question 1: Why the world’s economies are suffering a glut reaction Maximum Mark 2 Partial Mark 1 1 2 (a) (i) Explain what is meant by the phrase chronic global overcapacity (paragraph 2). • For a superficial statement only in terms of too much output • For noting this is a world-wide phenomenon • For a more expanded explanation in terms of excess supply / supply in relation to demand 4 1 4 4 (ii) How would you explain the author’s claim that there is too much of everything (paragraph 2) in the world when widespread global poverty exists? • For pointing our that there is not too much in relation to human needs • For an expansion of the above in terms of effective demand versus human demand / exclusion of the poor from markets • For a suitable discussion in terms of luxury goods / necessities / merit goods / demerit goods / distribution of income within countries / between countries 3 3 1 2 1 1 2 1 (b) Use the data (paragraph 3) and a separate supply and demand diagram to explain the change in the price of oil from (i) the supply side. • For correctly identifying one or more supply side factors, e.g. new sources of supply, technological improvements • For correctly drawing and labelling a diagram showing supply shifting to the right • For explaining the shift to the right (Maximum of 1 point if no diagram) (ii) the demand side. • For correctly identifying one or more demand side factors, e.g. low growth in Europe, diversification programmes • For correctly drawing and labelling a diagram showing demand shifting to the left • For briefly explaining the shift to the left (Maximum of one point if no diagram) M01/330/H(3)M- 3 -