Economics · 2019 · November · Paper 3 · HL · Markscheme

N19/3/ECONO/HP3/ENG/TZ0/XX/M 22 pages Markscheme November 2019 Economics Higher level Paper 3 – 3 – N19/3/ECONO/HP3/ENG/TZ0/XX/M Notes for examiners: 1. Whenever relevant, carry over marks must be awarded. If a candidate makes an error in calculation, but then uses the incorrect figure appropriately and accurately in later question parts, then the candidate may be fully rewarded. This is the “own-figure rule” and you should put OFR on the script where you are rewarding this. 2. Alternative approaches may be taken in responses to the [4] questions that use A02 command terms. If this is the case and the alternative approaches are valid, then full credit should be given. 1. (a) State two characteristics of a perfectly competitive market. [2] Award [1] for each valid characteristic. Characteristics may include: • many small firms • homogeneous product • no barriers to entry (and exit) • perfect information • perfect factor mobility • firms are price takers. (b) Using a fully labelled diagram, outline the relationship between marginal product (MP) and average product (AP) of labour. [4] Level Marks 0 The work does not meet a standard described by the descriptors below. 0 1 The written response is limited. 1–2 For a fully labelled diagram showing an MP curve that peaks earlier and higher and that intersects AP at its maximum. OR For outlining that MP will fall (due to diminishing returns) [1] and will intersect AP at its maximum, because if MP>AP, AP will rise, and if MP<AP, AP will fall [1]. 2 The written response is accurate. 3–4 For a fully labelled diagram showing an MP curve that peaks earlier and higher and which intersects AP at its maximum. AND For outlining that MP will fall (due to diminishing returns) [1] and will intersect AP at its maximum, because if MP>AP, AP will rise, and if MP<AP, AP will fall [1].