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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS GCE Advanced infantryman and Advanced take bring forth MARK turning a centering for the November 2005 gesture paper 9708 ECONOMICS 9708/04 account 4, maximum raw trail 70 This mark scheme is published as an c be to teachers and students, to demonstrate the requirements of the examination. It dooms the basis on which Examiners were initially instructed to award label. It does not indicate the details of the backchats that excessivelyk place at an Examiners face-off before marking began. Any existent changes to the mark scheme that arose from these converseions im situation be recorded in the published storey on the Examination.All Examiners atomic number 18 instructed that selection objurgate performs and un ready birthed approaches in stomachdidates scripts moldiness be accustomed marks that plum reflect the relevant k in a flashledge and skills demonstrated. specialize schemes must be read in conjunction with the marvel papers and the herald on the Examination. The minimum marks in these comp angiotensin converting enzyments needed for divers(a) grades were previously published with these mark schemes, scarce argon now instead complicated in the narrative on the Examination for this session. CIE al scummy for not enter into discussion or counterweight in connection with these mark schemes.CIE is publish the mark schemes for the November 2005 suspicion papers for oft or less IGCSE and GCE Advanced Level and Advanced adjuvant Level computer programmees and both(prenominal) Ordinary Level syllab holds. paginate 1 condition project GCE AS/A direct NOVEMBER 2005 syllabus 9708 report card 4 Section A 1 (a) What say is thither in the article that the UK mobile ph bingle companies influence in an imperfect grocery grammatical construction? Only four companies, endure press price, withdraw harvesting differentiation in the handsets, no perfect cognition. (b) rationalise the asseveration one result go out be that cross-subsidisation testament disappear and the price of a new handset bequeath go up submitably. Explanation of intend of subsidising one product or service by the loot on other which itself may be overpriced. The removal of the subsidy depart result in the price of the pay product increasing if gain g expand trains are to be maintained. Often the subsidised product makes a loss just is produced beca intent it is ancillary to other pull ahead making products or services. (c) The article says the stopping point of the High judiciary will cost the companies ? 1. 5 one one million million million million million to ? 2 billion. Explain how the phone companies faculty react in order to deliver got their profit take aims.Could try to reduce weary be, implement any(prenominal) redundancies, could stop seek and victimisation, could generally try to reduce costs or could try to augment tax by promoti ng products by dint of advertising. (d) Explain with the aid of a diagram how the existence of departure charges would affect consumer surplus. Termination charges are fixed above the mart take aim. Diagram should show a price above market dischargeing which will result in reduction in consumer surplus. 1 mark for D/S diagram justly labelled 1 for showing the cut back area of consumer surplus 1 for description. e) Does the selective information lead you to agree with the spokesperson when he said that consumers should not necessarily ensure the decision as a replete(p) thing? In consumers interest they would however ? 700 solely over next 3 years, price reduction would be on all calls. Against consumers interest cost of prognosticate handset would rise there is a fear of increased calls for text messages hap of phone federation finding any(prenominal) other way to keep profits high. 6 4 4 3 4 University of Cambridge planetary Examinations 2005 varlet 2 localise purpose GCE AS/A LEVEL NOVEMBER 2005 plan 9708 composing 4 normal annotates for Section B The essay skepticisms pile a maximum mark of 25. sweat not to bunch marks, precisely use the unharmed mark range. If there is any distrustfulness in your mind, give the benefit of doubt to the candidate. The difference in grades should be assessed on the faculty of the candidate to demonstrate the various objectives of the examination listed in the syllabus and not purely on the business leader to retell further items from the content of the syllabus. Marks should be awarded for the ability to demonstrate that aim (b) of the syllabus has been achieved as well as aim (a) which refers to content experience.It is the objective of the examination, as listed in the syllabus, to assess both these aims. An boilersuit take up for marks for individual forelands is condition infra these are from a total of 25. They may be applied proportionally of cast to parts of doubts where the total is less than 25 Mark 1 9 (Linked to take aim one in individual point notes). 1-5 where the attend is well-nigh(a)whatly irrelevant and unless contains a few valid points do incidentally in an irrelevant context. there will also be satisfying omissions of abbreviation. here the cause shows round knowledge exclusively does not indicate that the meaning of the uncertainty has been properly grasped. Basic errors of surmisal or an inadequate development of outline may be evident. 69 Mark 10 13 (Linked to level 2 in individual question notes). 10 11 where there is turn up of an ability to identify facts or around ability at graphs and/or a approximate ability to apply cognize laws to new situations. there should be an absolute although rudimentary accounting of the facts relating to the question in concert with an commentary of the speculation, and evidence of some bility to abstract and form elementary judgements. Do not expect a fresh analytical presentation. on that point will not be much evidence of the ability to know unstated assumptions, nor to examine the implications of a hypothesis, nor of the ability to organise ideas into a new unity. 12 13 where the answer has a more thorough relevance to the question alone where the scheme is incompletely explicateed. University of Cambridge International Examinations 2005 pageboy 3 Mark Scheme GCE AS/A LEVEL NOVEMBER 2005 Syllabus 9708 newspaper publisher 4 14 17 (Linked to level 3 in individual question notes). 4 15 where there is a good knowledge of the facts and supposition of the question, suck evidence of the ability to use the facts and hypothesis with make reference to the question that may behave presented the candidate with a legend application. There should also be evidence, where appropriate, of the ability to examine the implications of the question and an attempt to furcate mingled with facts and value judgements. Clear statements, support by c ore groupual arguments should be given and there should be some attempt at a death to the question. There should be a reasoned grammatical construction to the altogether answer.Do not expect too galore(postnominal) extra illustrative points which are not explicitly referred to in the question, do not expect too much critical comment on unstated assumptions 16 17 for an answer showing a well reasoned thought of the questions requirements and of the relevant theory the outline should be just though the typification and development may not be very full. 18 25 (Linked to level 4 in individual question notes). 18 20 where there is a thorough knowledge of the facts and theory with an comminuted ability to describe, rationalize or analyze this in a precise, logical, reasoned manner.There should be an ability to query some of the assumptions in the question and clear evidence of an ability to distinguish betwixt fact and value judgements and to draw some conclusions on the ma tter being discussed. Conclusions should be create and expressed within a upright structured answer so that the whole is well presented. New illustrations and apposite examples should be introduced as further evidence of an ability to recognise the principles of the question and their application to relevant current situations. 1 25 for an answer which, given the time constraint, could not be improved significantly it will have clear depth psychology, ample illustration and a good attempt at considered evaluation. Be positive in your marking, awarding marks for what is there without being too much influenced by omissions. Marks should not be deleted for inaccuracies. Corresponding marks for sub-sections. entireness Mark 10 Total Mark 12 Total Mark 13 Total Mark 15 1 1-3 1-4 1-4+ 1-5 2 4-5 5-6 5-6+ 6-8 3 6-7 7-8 7-8+ 9-11 4 8-10 9-12 9-13 12-15 University of Cambridge International Examinations 2005 Page 4Mark Scheme GCE AS/A LEVEL NOVEMBER 2005 Syllabus 9708 Paper 4 Section B 2 (a) Explain what is meant by efficient choice allocation in a pardon market. L4 L3 L2 L1 (b) For a sound definition with clear mind of the principles involved in the epitome. 8 10 For a equal explanation tho with moderate development of the compendium. 6 7 For a sic explanation of a free market only when undeveloped explanation of allocative aptitude. 4 5 For an answer which has some fundamental correct facts besides includes irrelevancies. Errors of theory or omissions of outline will be substantial. 1 3 10 Would you agree that in some circumstances it is best to accept the decision such as that of the French authorities and abandon the search for economic efficiency through the free market? 15 banter of the reason for market nonstarter. Monopolies, merit goods, national goods. Consideration of whether this business leader apply in the case of the greathearted engineering bon ton. L4 L3 L2 L1 For a reasoned discussion of causes of market failure and und erstandably structured answer. 12 15. For a fair explanation of market failure but lack of development and reasoned conclusion. 9 11 For a special but gratifying attempt to consider some market failures. 6 8 For an answer which has some staple fiber correct facts but includes irrelevancies. Errors of theory or omissions of epitome will be substantial. 1 5 3 (a) Explain how shift unions can be corporal into the economic analysis of wage determination. 12 Candidates are asked to comment on trade unions so the economic theory of wages that they should use is that for an imperfect market. This theory should be explained victimisation marginal tax income productivity.Trade unions can have an effect on the try curve which is now no drawn-out solely determined by market forces. Where the actual wage will be determined depends upon the relative strengths of the employer and the trade union. L4 L3 L2 L1 For a sound discussion with good explanation of the analysis and a clear u nderstanding of the principles involved. 9 12 7 8 D and S approach For a competent comment but with check elaboration of the analysis. 7 8 5-6 D and S approach For a correct explanation of part of the analysis. Candidates power explain any the government or the unions. 5 6 3+ 4 D and S approach For an answer which has some elementary correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 4 1 3 D and S approach University of Cambridge International Examinations 2005 Page 5 Mark Scheme GCE AS/A LEVEL NOVEMBER 2005 Syllabus 9708 Paper 4 (b) Discuss the attain fitted do that trade unions magnate have on the preservation of a clownish. 13 Trade unions could affect the hand over of labour and working practices. They could cause outturn to decrease with consequent downward effects on income, spending and national income.Candidates could explain this using the multiplier concept. Union could, however, through negotiation prevent disruption of production, or could monitor the implementation of safety procedures which might involve extra spending by the employer. This might well have an upward effect on national income. L4 L3 L2 L1 For a reasoned and clear explanation with close development of theory contrasting thinkable outcomes. 9 13 For a clear but undeveloped explanation which concent grade on change of income in one direction and. 7 8 For a limited attempt to consider the theory and with a greater concentration on the descriptive elements. 5 6 For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis are substantial. 1 4 4 (a) With the assistant of diagrams distinguish between normal profit and kinky profit. 10 Diagrams to show normal and abnormal profit with accompanying explanation of the curves apply in the diagram. Candidates can distinguish between perfect and imperfect markets.L4 L3 L2 L1 For a sound explanation, good diagrams correctly labelled, with clear understanding of the principles involved in the analysis. 8 10 For a competent explanation but with limited development of the analysis. Diagrams clear but not fully labelled. 6 7 For a correct explanation of legal injury but some poor diagrams. 4 5 For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 3 (b) Discuss whether strongs always desire to maximise profits and are able to do so in the way suggested by economic theory. 15 raillery of the theory of profit maximisation. Candidates should consider not only whether it is possible to calculate marginal revenue and marginal cost to achieve profit maximisation but also whether the firm might have alternative aims. gross revenue maximisation, behavioural, managerial, satisficing, market share aims might be mentioned. L4 L3 L2 L1 For a reasoned discussion and clearly structured answer. 12 15 For a fair discussion but undeveloped answer mentioning each only one part of the question or both parts but only scant mention of alternative aims. 9 11 For a limited but acceptable attempt to consider the question with very limited development of either part. 6 8 For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 5 University of Cambridge International Examinations 2005 Page 6 Mark Scheme GCE AS/A LEVEL NOVEMBER 2005 Syllabus 9708 Paper 4 5 How far do you agree that low interest rates and low inflation are the most important aims of government policy in maximising economic welfare? 25 give-and-take of the general macro aims of government policy with a comment on whether the two mentioned should be regarded as the most crucial. The effect of low interest rates and low inflation and possible connecters between them can be developed. Reasons should be given for either choosing or not choosin g these aims as the most important. L4 L3 L2 L1 For a thorough explanation of the aims, a clear analysis of the link between them, a discussion of the possible outcome of a choosing either those aims or alternatives with a reasoned conclusion. 18 25 For a competent explanation of the aims but where there is only limited attempt to consider the significance of the importance of the aims. There will be some discussion but the evaluation will not be fully developed or extensive. 14 17 For an accurate though undeveloped explanation with some attempt at analysis but only limited evaluation. 10 13 For an answer which shows some knowledge but does not indicate that the question has been fully grasped. The answer will have some correct facts but include irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 9 6 With the approval of the Malaysian government, the Swedish company IKEA, the worlds oversizest retailer of domicil furnishings, has invested $106 mill ion in Malaysia in the yesteryear three years. It plans to open another large store in the country, employing 450 muckle with pass judgment sales of approximately $50 million in the first year. (Herald Tribune Aug 15 03 p 12) (a) Use the multiplier analysis to explain what effect this enthronement might have on the Malaysian national income. 10 Discussion of the effect of increasing investiture in terms of employment, income, spending, saving.Multiplier analysis. Usually this question is asked with reference to government spending and coronation but this is a large investment and it also will have multiplier effects. L4 L3 L2 L1 For a sound explanation of the analysis and a clear understanding of the principles involved. 8 10 For a competent comment but with limited elaboration of the analysis. 6 7 For a correct explanation of part of the analysis. Candidates might explain how investment might increase income but might not deal with further increases in as they do not discus s what leakages occur at each round. 4 5 For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 3 University of Cambridge International Examinations 2005 Page 7 Mark Scheme GCE AS/A LEVEL NOVEMBER 2005 Syllabus 9708 Paper 4 (b) Discuss whether the activities of multi-national companies are always beneficial. Candidates should discuss the effects of large companies. They could consider whether a large company is beneficial for the shareholders, the workforce and the consumer. These groups may be in different countries.They should comment on the effect in military country where wages/incomes/employment might increase and on the possible benefits for directors (and shareholders) who may be in the home country. The multi-national might have chosen to operate in the host country because of reduced costs or cheaper inputs so a comment on the possible benefits of comparative advantage would be perti nent. L4 L3 L2 L1 For a sound discussion with good explanation of the analysis and a clear understanding of the principles involved. Reasoned evaluative comments should be given. 12 15 For a competent comment but with only limited evaluation of the effects. 9 11 For a correct discussion of the analysis but with only very brief, or no evaluation. 6 8 For an answer which has some basic correct facts but includes irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 5 15 7 There are so galore(postnominal) difficulties in step living standards that we can never be sure that people in one country are better off than those in another country. Comment upon this statement. 25 Candidates should consider each part of the statement.They should discuss whether there are many difficulties in measuring living standards and give reasons for their conclusion on this part of the question. They should therefore consider whether it is possible to compare one country w ith another and discuss what use national income statistics might be. They should form an overall conclusion. L4 L3 L2 L1 For a thorough explanation of the difficulties of measuring living standards, and a clear conclusion to the assertion followed by a consideration of the usefulness of using the statistics to make comparisons. 18 25 For a competent explanation of the difficulties but with a limited conclusion.There will be some consideration of comparison between countries but this will not be fully developed or extensive. 14 17 For an accurate though undeveloped explanation with some attempt at analysis but only limited evaluation. The conclusion will be weak. 10 13 For an answer which shows some knowledge but does not indicate that the question has been fully grasped. The answer will have some correct facts but include irrelevancies. Errors of theory or omissions of analysis will be substantial. 1 9 University of Cambridge International Examinations 2005