Cambridge IGCSE Economics Past Paper Mark Scheme May/June 2022 PDF

Cambridge IGCSE™ ECONOMICS 0455/21 Paper 2 Structured Questions May/June 2022 MARK SCHEME Maximum Mark: 90...

Cambridge IGCSE™ ECONOMICS 0455/21 Paper 2 Structured Questions May/June 2022 MARK SCHEME Maximum Mark: 90 Published This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. It shows the basis on which Examiners were instructed to award marks. It does not indicate the details of the discussions that took place at an Examiners’ meeting before marking began, which would have considered the acceptability of alternative answers. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge International will not enter into discussions about these mark schemes. Cambridge International is publishing the mark schemes for the May/June 2022 series for most Cambridge IGCSE, Cambridge International A and AS Level and Cambridge Pre-U components, and some Cambridge O Level components. This document consists of 24 printed pages. © UCLES 2022 [Turn over 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Generic Marking Principles These general marking principles must be applied by all examiners when marking candidate answers. They should be applied alongside the specific content of the mark scheme or generic level descriptors for a question. Each question paper and mark scheme will also comply with these marking principles. GENERIC MARKING PRINCIPLE 1: Marks must be awarded in line with: the specific content of the mark scheme or the generic level descriptors for the question the specific skills defined in the mark scheme or in the generic level descriptors for the question the standard of response required by a candidate as exemplified by the standardisation scripts. GENERIC MARKING PRINCIPLE 2: Marks awarded are always whole marks (not half marks, or other fractions). GENERIC MARKING PRINCIPLE 3: Marks must be awarded positively: marks are awarded for correct/valid answers, as defined in the mark scheme. However, credit is given for valid answers which go beyond the scope of the syllabus and mark scheme, referring to your Team Leader as appropriate marks are awarded when candidates clearly demonstrate what they know and can do marks are not deducted for errors marks are not deducted for omissions answers should only be judged on the quality of spelling, punctuation and grammar when these features are specifically assessed by the question as indicated by the mark scheme. The meaning, however, should be unambiguous. GENERIC MARKING PRINCIPLE 4: Rules must be applied consistently, e.g. in situations where candidates have not followed instructions or in the application of generic level descriptors. © UCLES 2022 Page 2 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED GENERIC MARKING PRINCIPLE 5: Marks should be awarded using the full range of marks defined in the mark scheme for the question (however; the use of the full mark range may be limited according to the quality of the candidate responses seen). GENERIC MARKING PRINCIPLE 6: Marks awarded are based solely on the requirements as defined in the mark scheme. Marks should not be awarded with grade thresholds or grade descriptors in mind. © UCLES 2022 Page 3 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Social Science-Specific Marking Principles (for point-based marking) 1 Components using point-based marking: Point marking is often used to reward knowledge, understanding and application of skills. We give credit where the candidate’s answer shows relevant knowledge, understanding and application of skills in answering the question. We do not give credit where the answer shows confusion. From this it follows that we: a DO credit answers which are worded differently from the mark scheme if they clearly convey the same meaning (unless the mark scheme requires a specific term) b DO credit alternative answers/examples which are not written in the mark scheme if they are correct c DO credit answers where candidates give more than one correct answer in one prompt/numbered/scaffolded space where extended writing is required rather than list-type answers. For example, questions that require n reasons (e.g. State two reasons …). d DO NOT credit answers simply for using a ‘key term’ unless that is all that is required. (Check for evidence it is understood and not used wrongly.) e DO NOT credit answers which are obviously self-contradicting or trying to cover all possibilities f DO NOT give further credit for what is effectively repetition of a correct point already credited unless the language itself is being tested. This applies equally to ‘mirror statements’ (i.e. polluted/not polluted). g DO NOT require spellings to be correct, unless this is part of the test. However spellings of syllabus terms must allow for clear and unambiguous separation from other syllabus terms with which they may be confused (e.g. Corrasion/Corrosion) 2 Presentation of mark scheme: Slashes (/) or the word ‘or’ separate alternative ways of making the same point. Semi colons (;) bullet points ( ) or figures in brackets (1) separate different points. Content in the answer column in brackets is for examiner information/context to clarify the marking but is not required to earn the mark (except Accounting syllabuses where they indicate negative numbers). © UCLES 2022 Page 4 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED 3 Calculation questions: The mark scheme will show the steps in the most likely correct method(s), the mark for each step, the correct answer(s) and the mark for each answer If working/explanation is considered essential for full credit, this will be indicated in the question paper and in the mark scheme. In all other instances, the correct answer to a calculation should be given full credit, even if no supporting working is shown. Where the candidate uses a valid method which is not covered by the mark scheme, award equivalent marks for reaching equivalent stages. Where an answer makes use of a candidate’s own incorrect figure from previous working, the ‘own figure rule’ applies: full marks will be given if a correct and complete method is used. Further guidance will be included in the mark scheme where necessary and any exceptions to this general principle will be noted. 4 Annotation: For point marking, ticks can be used to indicate correct answers and crosses can be used to indicate wrong answers. There is no direct relationship between ticks and marks. Ticks have no defined meaning for levels of response marking. For levels of response marking, the level awarded should be annotated on the script. Other annotations will be used by examiners as agreed during standardisation, and the meaning will be understood by all examiners who marked that paper. © UCLES 2022 Page 5 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Common examiner annotations on 0455/2281/0987 and 2286 Uncertain what the candidate means – an MAX illogical line of thought Benefit of the doubt Not answered question Blank page Not established – a statement made without any support Caret – a word is missing. Repetition Confused SEEN Cross Tick – a credit worthy point Highlight Too vague L Nothing creditworthy Level 1 Level 2 Level 3 © UCLES 2022 Page 6 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 1(a) Calculate the number of births in Cyprus in 2019. 1 12 240 (1) 1(b) Identify two indicators of living standards. 2 Do not reward GDP GDP per head / per capita (1). HDI (1). Life expectancy / healthy people (1). Proportion of people in primary sector (1). Level of education / qualifications (1). 1(c) State why the global market for grapes was in disequilibrium 2 in 2019. Bad weather / failure of the grape harvest (1) there was a shortage (1) which means demand exceeded supply (1). 1(d) Explain two reasons why more well-educated workers tend to 4 One mark for each of two reasons identified and one work past retirement age than less-educated workers. mark for each explanation. Logical explanation which might include: Well-paid / good work benefits (1) which provides an incentive to work for longer / high job satisfaction / enter workforce late (1). Healthy (1) and so more able to work for longer / remain productive (1). Work in jobs which do not require physical strength / less tiring (1) older workers tend to be less strong / allows them to continue working as long as remain fit (1). © UCLES 2022 Page 7 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 1(e) Analyse how a rise in a country’s retirement age is likely to 4 affect its government’s budget. Coherent analysis which might include: A rise in the retirement age / less people retired will reduce the cost of pensions (1) may reduce government spending / government may spend on alternatives e.g., infrastructure, education or health (1). More people in work will increase incomes / businesses expand production (1) raise direct tax revenue (1) spending will increase (1) raise indirect tax revenue (1). © UCLES 2022 Page 8 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 1(f) Analyse the relationship between inflation rates and current 5 Do not accept current account balance is high or low. account balances. Answers need to refer to size of surplus or deficit. Coherent analysis which might include: Simply using data without explanation is description rather than analysis. Overview: Generally, an inverse relationship / the lower the inflation rate, the higher the current account surplus or the higher the inflation rate, the higher the current account deficit (1). Supporting evidence−max of 2 marks Mongolia has the highest inflation rate (1) and the largest current account deficit (1) Mongolia / Kenya / Nepal have the highest inflation rates (1) all have a current account deficit (1). Iceland / Slovenia have a low rate of inflation (1) but have a current balance of payments surplus (1) Exception: Cyprus lowest inflation rate (1) but a current account deficit / 3rd highest current account deficit (1). Comments: Most of the table shows the expected relationship. (1) Low inflation rates may make products more price competitive / high inflation rates may make prices less price competitive (1) © UCLES 2022 Page 9 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 1(g) Discuss whether or not, after 2019, Cyprus’s production 6 Apply this example to all questions with the possibility curve (PPC) is to shift to the right. command word DISCUSS (1g, 1h, 2d, 3d, 4d and 5d) Award up to 4 marks for logical reasons why it might, which may include: Each point may be credited only once, on either side of an argument, but separate development as to Quantity / quality of resources may have increased (1) retirement how/why the outcome may differ is rewarded. age may have increased (1) people living longer (1) so labour force is likely to have increased (1). Generic example Marks Investment may have increased (1) due to low interest rates (1) Tax revenue may decrease 1 more capital goods would increase productive capacity (1). Award up to 4 marks for logical reasons why it might not, because of reason e.g., incomes may be 1 which may include: lower. Quantity and quality of resources may have decreased (1) land Tax revenue may increase because 0 quality is decreasing (1) which will reduce the productivity of land incomes may be higher i.e., reverse of a (1). previous argument. Tax revenue may increase because of a 1 Entrepreneurs may emigrate (1) reducing the supply of enterprise different reason i.e., not the reverse of a / skilled workers (1). previous argument e.g., government spending on subsidies may stimulate the Birth rate is falling (1) size of workforce may fall in future (1) economy more than spending on education. Covid−19 may have reduced productivity (1). For recognising that any of these reasons could result in PPC shifting to the left / stay unchanged (1). © UCLES 2022 Page 10 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 1(h) Discuss whether or not adopting capital-intensive production 6 will benefit consumers. Award up to 4 marks for logical reasons why it might, which may include: It may reduce costs of production / more efficient / may result in economies of scale (1) lower costs may reduce prices (1). It may avoid disruption to supply (1) as no industrial action / strikes (1). It may be quicker / faster (1) to respond to changes in consumer demand (1) It may raise quality (1) as absence of human error (1). Award up to 4 marks for logical reasons why it might not, which may include: Products may be standardised / lack variety (1) individual wants may not be met (1). Capital equipment may break down / costly to maintain (1) causing delays in production (1). Initial high cost of capital equipment (1) may push up prices (1). © UCLES 2022 Page 11 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 2(a) Define foreign exchange rate. 2 The price / value of a currency (1) in terms of another currency / currencies (1). 2(b) Explain two reasons why the value of a country’s exports 4 One mark for each of two reasons identified and one may be greater than the value of its imports. mark for each explanation. Logical explanation which might include: Price of exports may be lower than price of other countries’ products (1) due to e.g., devaluation / depreciation / weaker currency / higher productivity / lower inflation (1). Quality of exports may be higher than the quality of other countries’ products (1) due to e.g., more investment / better education / specialisation (1). Incomes abroad may have increased (1) enabling foreigners to buy more of the country’s products (1). Protective measures (1) restrict imports / subsidise domestic firms or exports (1). May have high value exports e.g., oil (1) with high (global) demand (1). Recession / low demand at home (1) results in fewer imports / encourages firms to export (1). © UCLES 2022 Page 12 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 2(c) Analyse how an increase in income tax can affect a country’s 6 inflation rate. One mark for a simple explanation that an increase in income tax can reduce the rate of inflation Coherent analysis which might include: An increase in income tax will reduce disposable income / purchasing power (1) this may reduce consumer spending (1) lower total demand (1) this may encourage firms to reduce prices / reduce price rises (1) lower demand-pull inflation (1). Increase in income tax may encourage workers to press for wage rises (1) increase costs of production (1) cause cost-push inflation (1). Income tax revenue can be used to provide e.g., subsidies to certain goods and services (1) reducing prices (1). © UCLES 2022 Page 13 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 2(d) Discuss whether or not governments should aim for a high 8 rate of economic growth. Level Description Marks 3 A reasoned discussion which 6−8 In assessing each answer, use the table opposite. accurately examines both sides of the economic argument, making Why it should: use of economic information and economic growth can raise incomes clear and logical analysis to higher incomes can raise living standards evaluate economic issues and economic growth can reduce unemployment situations. One side of the economic growth can increase tax revenue allowing the argument may have more depth government to spend more on e.g., education. than the other, but overall, both sides of the argument are Why it should not: considered and developed. There may deplete non-renewable resources which can reduce is thoughtful evaluation of future growth economic concepts, terminology, may result in pollution information and / or data may put other demands on workers who may have to appropriate to the question. The work long hours discussion may also point out the may lead to a deficit on current account of the balance of possible uncertainties of alternative payment decisions and outcomes. may result in greater inequality risk of inflation 2 A reasoned discussion which 3−5 makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one- sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. © UCLES 2022 Page 14 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 2(d) Level Description Marks 1 There is a simple attempt at using 1−2 economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 0 A mark of zero should be awarded 0 for no creditable content. Question Answer Marks Guidance 3(a) Identify two influences on what products a person buys. 2 Accept any reasonable example. Two from e.g.: Price (1) income (1) tastes / habit / culture (1) advertising (1) availability (1) social media / influencers (1) quality (1) government regulations/ laws (1) age (1). 3(b) Explain two ways a government could decrease the 4 One mark for each of two ways identified and one consumption of demerit goods. mark for each explanation. Logical explanation which might include: Impose an (indirect) tax / tariff on goods (1) raise the price (1). Provide information (1) about harmful effects (1). Ban / regulate (1) to stop or reduce the availability of the product (1). Set minimum price above market price (1) raise prices (1). Import quota (1) restricts availability for purchase (1). © UCLES 2022 Page 15 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 3(c) Analyse why workers may join a trade union. 6 Award no marks for examples of industrial action Coherent analysis which might include: Understanding of role of trade union (1) to gain greater bargaining power (1) through industrial action (1) to negotiate with employers (1) for higher wages (1) better working conditions / health & safety (1) fringe benefits (1). To represent them (1) in disputes with employers (1) e.g., to protect their rights (1) against unfair dismissal / discrimination (1) increase job security (1) compensation for work injuries (1). To gain greater influence on the government (1) to e.g., increase a national minimum wage (1) increase job opportunities (1). Unions may provide services to members (1) training courses (1) improving health and safety (1) benefits e.g. discounts at gyms (1) financial and legal advice (1). © UCLES 2022 Page 16 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 3(d) Discuss whether or not tertiary sector workers are paid more 8 than primary sector workers. Level Description Marks In assessing each answer, use the table opposite. 3 A reasoned discussion which 6−8 accurately examines both Why they might be: sides of the economic may be more skilled / qualified argument, making use of may be more productive economic information and tertiary products may have higher value added clear and logical analysis to tertiary products may have higher demand, so industries evaluate economic issues and may have greater ability to pay higher wages. situations. One side of the argument may have more Why they might not be: depth than the other, but may be less likely to belong to a trade union overall, both sides of the some workers may be in lower paid jobs e.g., cleaners argument are considered and some tertiary sector firms / occupations may be declining developed. There is thoughtful some may be less experienced evaluation of economic some may not be in promoted posts concepts, terminology, primary sector products may have higher value added information and / or data e.g., oil appropriate to the question. primary sector workers in a developed country may be The discussion may also point paid more than tertiary workers in an undeveloped out the possible uncertainties country. of alternative decisions and primary jobs may be more dangerous e.g., mining outcomes. © UCLES 2022 Page 17 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 3(d) Level Description Marks 2 A reasoned discussion which 3−5 makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one- sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. 1 There is a simple attempt at 1−2 using economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 0 A mark of zero should be 0 awarded for no creditable content. Note: accept approach that discusses why primary sector workers may be better paid. © UCLES 2022 Page 18 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 4(a) Define privatisation. 2 Award 1 mark for an understanding of the private sector Privatisation is the sale of state-owned / public sector firms / public sector assets (1) to the private sector / investors / Accept change / movement / turned from public to individuals (1). private sector 4(b) Explain the difference between absolute and relative poverty. 4 No mark for stating those in relative poverty can meet their basic needs but not their wants. Logical explanation which might include: Absolute poverty is a lack of basic necessities (1) e.g., food, clothing or housing / e.g. $1.90 a day (1). Relative poverty is being poor in comparison to other people (in their country) (1) example of a measure such as less than 60% of average income / not able to participate fully in normal activities in their country (1). 4(c) Analyse how specialisation can benefit firms. 6 Maximum of one mark for any number of examples of economies of scale. Coherent analysis which might include: Note that some students only write about division of Understanding of specialisation of a firm / workers become skilled labour which is not the question but some of the at producing a particular product (1) lower cost of production (1) features also apply to specialisation of firms. gain a good reputation / high quality of good or service (1) increase demand (1) increase output (1) raise revenue (1) increase profit (1). May enable firms to gain advantage of economies of scale (1) example (1) become (internationally) competitive (1). Easier to mechanise / improve technology (1) speeds up / faster production / become more efficient (1). © UCLES 2022 Page 19 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 4(d) Discuss whether or not the use of supply-side policy will 8 Level Description Marks reduce unemployment. 3 A reasoned discussion which accurately 6-8 examines both sides of the economic In assessing each answer, use the table opposite. argument, making use of economic information and clear and logical analysis Why it might: to evaluate economic issues and situations. One side of the argument may education and training can improve the skills of workers, have more depth than the other, but making them more attractive to employers overall, both sides of the argument are education and training can increase mobility of workers, considered and developed. There is reducing structural unemployment thoughtful evaluation of economic concepts, terminology, information and/or lower income tax / lower unemployment benefit can increase data appropriate to the question. The the incentive to work / reduce voluntary unemployment discussion may also point out the possible privatisation and deregulation may make firms more uncertainties of alternative decisions and competitive, may expand and employ more workers outcomes. Subsidies to employ more workers e.g., furlough schemes. 2 A reasoned discussion which makes use 3-5 of economic information and clear analysis to evaluate economic issues and Why it might not: situations. The answer may lack some education and training may be in the wrong areas depth and development may be one-sided. measures can take a long time to have an effect There is relevant use of economic concepts, terminology, information and privatisation and deregulation may result in a reduction in data appropriate to the question. output and employment supply-side policy will not reduce cyclical unemployment 1 There is a simple attempt at using 1-2 economic definitions and terminology. cut in unemployment benefit may increase unemployment by Some reference may be made to reducing total demand. economic theory, with occasional understanding. 0 A mark of zero should be awarded for no 0 creditable content. © UCLES 2022 Page 20 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 5(a) Identify the reward to labour and the reward to land. 2 Wages (1) rent (1). 5(b) Explain how an increase in a worker’s income can affect their 4 No marks for causes of higher income. mobility of labour. Logical explanation which might include: An increase in income will enable a worker to spend more on their education (1) increasing occupational mobility (1). Higher income will make housing more affordable (1) increasing geographical mobility (1). Higher income will make high-tech products more affordable (1) enabling a worker to be better informed (1) increasing both occupational and geographical mobility (1). Higher incomes may discourage a worker from changing jobs / may be content with current job (1) may be satisfied with income level (1) reducing geographical and occupational mobility (1). Higher incomes make it easier to afford car / use public transport (1) increases geographical mobility (1). © UCLES 2022 Page 21 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 5(c) Analyse, using a demand and supply diagram, how a greater 6 Note awareness of the health benefits of eating fruit will affect the market for fruit. Coherent analysis which might include: Up to 4 marks for D & S diagram: Axes correctly labelled–price and quantity or p and q (1). Original demand and supply curves correctly labelled (1). New demand curve shifted to the right (1). Equilibriums–shown by lines P1 and Q1 and P2 and Q2 or equilibrium points E1 and E2 (1). Up to 2 marks for written analysis which might include: Greater awareness of health benefits will encourage more people to eat / demand fruit (1) Raise price / raise quantity traded (1). Note: Axes do not have to be labelled price of fruit and quantity of fruit to get mark. No marks for stating price changes from P1 to P2 or quantity changes from Q1 to Q2. To get first mark in written analysis they must refer to fruit. © UCLES 2022 Page 22 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 5(d) Discuss whether or not a market economic system benefits 8 an economy. Level Description Marks In assessing each answer, use the table opposite. 3 A reasoned discussion which 6−8 accurately examines both Why it might: sides of the economic profit incentive and competition may increase efficiency argument, making use of wage differentials may encourage effort economic information and price may be low and quality high clear and logical analysis to country’s products may be internationally competitive evaluate economic issues and economic growth may be high situations. One side of the consumer choice may be high argument may have more consumer sovereignty may be high depth than the other, but overall, both sides of the Why it might not: argument are considered and risk of market failure developed. There is thoughtful public goods will not be provided evaluation of economic demerit goods are overconsumed and merit goods and concepts, terminology, under-consumed information and / or data problem of pollution and other external costs appropriate to the question. unemployment may be high as lack of co-ordination The discussion may also point some countries may lack the support structures e.g., out the possible uncertainties legal system to enforce property rights to allow market of alternative decisions and forces to work efficiently. outcomes. monopolies can be created © UCLES 2022 Page 23 of 24 0455/21 Cambridge IGCSE – Mark Scheme May/June 2022 PUBLISHED Question Answer Marks Guidance 5(d) Level Description Marks 2 A reasoned discussion which 3−5 makes use of economic information and clear analysis to evaluate economic issues and situations. The answer may lack some depth and development may be one- sided. There is relevant use of economic concepts, terminology, information and data appropriate to the question. 1 There is a simple attempt at 1−2 using economic definitions and terminology. Some reference may be made to economic theory, with occasional understanding. 0 A mark of zero should be 0 awarded for no creditable content. © UCLES 2022 Page 24 of 24