The price system and the microeconomy (AS level)

Worked examples (6)

• 1Define effective demand (3 marks)
• 2Shift or movement? (4 marks)
• 3Identify demand shifters (5 marks)
• 4Identify supply shifters (5 marks)
• 5Diagram: effect of a cheaper substitute (6 marks)
• 6Evaluate reliability of demand/supply predictions (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Calculate and interpret PED (4 marks)
• 2Calculate and classify YED (4 marks)
• 3Calculate and classify XED (4 marks)
• 4Use PED to advise on price and revenue (5 marks)
• 5Explain why PED varies along a straight line (6 marks)
• 6Evaluate elasticity for setting a tax (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Calculate and interpret PES (4 marks)
• 2Identify PES from supply curves (3 marks)
• 3Explain factors affecting PES (5 marks)
• 4PES and the time period (5 marks)
• 5Why inelastic supply causes volatile prices (6 marks)
• 6Evaluate ways to raise a firm's PES (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Identify surplus and shortage (3 marks)
• 2Apply the 4-step shift method (4 marks)
• 3Classify market relationships (5 marks)
• 4Apply the functions of price (6 marks)
• 5Two simultaneous shifts (6 marks)
• 6Evaluate price as a way to allocate resources (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section B(b) style

Worked examples (6)

• 1Identify surplus areas on a diagram (3 marks)
• 2Calculate consumer surplus (4 marks)
• 3Effect of a supply increase on surplus (5 marks)
• 4Elasticity and the size of consumer surplus (5 marks)
• 5Surplus and tax incidence (6 marks)
• 6Evaluate surplus as a welfare measure (8 marks)

Model answers (4)

• ✓Model answer — 9708 Paper 2 Section B(a) style
• ✓Model answer — 9708 Paper 2 Section A style
• ✓Model answer — 9708 Paper 2 Section B(b) style
• ✓Model answer — 9708 Paper 2 Section B(b) style