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Economics IGCSEPDF 31
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Marking Scheme-
Incomes may be higher (1) allowing people to buy more of the product (1).
There may be a larger population (1) more potential buyers (1).
The product may be more to the taste of people in that country (1) example e.g. falafel is
popular in the middle east (1).
The product may be more heavily advertised (1) which may increase the attractiveness of the
product (1).
Price may be lower (1) due to lower costs of production / government subsidy / lower (indirect)
taxes (1).
Price of substitutes may be higher (1) example (1).
Credit may be more available / interest rate lower (1)
Q.In 2019, France produced inside its production possibility curve (PPC). France exports a wide
range of its products. It is the world's top exporter of luxury perfume and the 7th largest exporter of
soap. Changes in technology affect the products people produce and buy. The French
government plans to upgrade its infrastructure for all households to have internet access.
MARKING SCHEME-
Analyse, using a demand and supply diagram, how an increase in income will affect the market
for a luxury brand of perfume.
[6]
Mark Scheme
Coherent analysis which might include: Up to 4 marks for the diagram:
D and 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 or equilibrium points (1).
Up to 2 marks for written analysis which might include:
Luxury perfume will be more affordable / greater purchasing power / luxury perfume will take a
smaller proportion of income / more will be demanded at the same price (1) price will rise /
quantity traded will increase (1).
Q.In May 2017, the price of olive oil rose by more than 10%. This was caused by a drought in
Greece, Italy, Spain and Tunisia, the major producing countries. Global supply was forecast to
fall by 14% in
2017. Demand for olive oil fell in Europe, but rose in a number of other countries including
Australia, Brazil and China. Some basic food items, including bread and rice, are taxed in some
countries but are subsidised in other countries.
Analyse why the demand for a product may be higher in one country than in another country. [6]