A-LevelEconomicsThe price system and the microeconomy9708/42 · May/June 2017 · Q225 Marks
Choice is an essential part of economics. Sometimes consumers change their choices either when shops have special offers on previously very expensive luxury products, or when advertising persuades them to change their preferences. Analyse how the economic theory of indifference curves can be used to construct a consumer's demand curve. Discuss whether this theory can explain the above changes in choice.
- Choice is an essential part of economics. Sometimes consumers change their choices either when shops have special offers on previously very expensive luxury products, or when advertising persuades them to change their preferences. Analyse how the economic theory of indifference curves can be used to construct a consumer's demand curve. Discuss whether this theory can explain the above changes in choice.[25]
Mark scheme
Marking points from the official mark scheme (May/June 2017). The mark or mark type is shown in brackets.
- Explanation of indifference curves, equilibrium point, (ii) link between indifference curves and demand curve, (iii) discussion of how reduced price can affect equilibrium/demand for a luxury product, shift of budget line, income substitution effects, (iv) advertising, change in tastes would change the shape of the indifference curve.
- Level 4 (18-25 marks): for an answer illustrating all the 4 elements of the question, equilibrium, construction of a demand curve, change in demand, and change in shape of indifference curve and a conclusion. No conclusion max. 22, 18-19 marks if 3 elements well done with a conclusion.
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