A-LevelEconomicsThe price system and the microeconomy9708/22 · May/June 2020 · Q320 Marks
In summer 2018, many countries suffered a water shortage because of a long spell of very dry weather.
- (a)Explain whether you would expect the price elasticity of supply of water to be relatively elastic or relatively inelastic.[8]
- (b)Consider the short-term and long-term policies that could be adopted to deal with a water shortage in an economy and discuss whether these are likely to be successful.[12]
Mark scheme
Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.
- For knowledge and understanding of the concept of elasticity of supply (Up to 2 marks)
- For an understanding of what price elasticity of supply measures (1 mark) and for an accurate formula (1 mark)
- For application to explain why water might be price elastic in supply with due reference to the factors that influence the elasticity of supply (3 marks)
- For application to explain why water might be price inelastic in supply with due reference to the factors that influence the elasticity of supply (3 marks)
- Up to 8 marks for Analysis
- For analysis that considers any policy that might reduce the demand for water or increase the supply of water in the short-run (Up to 4 marks)
- For analysis that considers any policy that might reduce the demand for water or increase the supply of water in the long-run (Up to 4 marks)
- Up to 4 marks for Evaluation
- For evaluative comment and a reasoned conclusion on the likely success of the policies considered (4 marks)
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