A-LevelEconomicsThe price system and the microeconomy9708/21 · May/June 2020 · Q320 Marks

There is increasing concern about the impact of foreign holidays on the environment of the host country.

(a)Explain, with the aid of a demand and supply diagram, two factors that might cause an increase in the demand for foreign holidays.[8]
(b)Discuss whether an indirect tax on foreign holidays is likely to be effective in reducing the number of holidays taken.[12]

This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

[2] Up to 2 marks for Knowledge and Understanding
[1] For correct diagram: Vertical axis correctly labelled: P/Price, horizontal axis correctly labelled: Q/Quantity and Demand and Supply curves correctly drawn and labelled
[1] Shift of the demand curve correctly drawn and labelled
[6] Up to 6 marks for Application
[3] Application of two factors to an increase in the demand for foreign holidays: Explanation of first factor
[3] Application of two factors to an increase in the demand for foreign holidays: Explanation of second factor
[8] Up to 8 marks for Analysis
[4] Effectiveness of an indirect tax in reducing the number of holidays taken
[4] Lack of effectiveness of an indirect tax in reducing the number of holidays taken
[4] Up to 4 marks for Evaluation
For exercising some judgement on whether an indirect tax on foreign holidays is likely to be effective in reducing the number of holidays taken
[1] Reserve 1 mark for a conclusion

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