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Mark Scheme (Results)

Summer 2024

Pearson Edexcel International Advanced Level

In Economics (WEC11) Paper 01
Unit 1: Markets in Action
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Summer 2024
Question Paper Log Number P75888A
Publications Code WEC11_01_2406_MS
All the material in this publication is copyright
© Pearson Education Ltd 2024
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General Marking Guidance

• All candidates must receive the same treatment. Examiners must

mark the first candidate in exactly the same way as they mark the last.
• Mark schemes should be applied positively. Candidates must be
rewarded for what they have shown they can do rather than penalised
for omissions.
• Examiners should mark according to the mark scheme not according
to their perception of where the grade boundaries may lie.
• There is no ceiling on achievement. All marks on the mark scheme
should be used appropriately.
• All the marks on the mark scheme are designed to be awarded.
Examiners should always award full marks if deserved, i.e. if the
answer matches the mark scheme. Examiners should also be
prepared to award zero marks if the candidate’s response is not
worthy of credit according to the mark scheme.
• Where some judgement is required, mark schemes will provide the
principles by which marks will be awarded and exemplification may be
limited.
• When examiners are in doubt regarding the application of the mark
scheme to a candidate’s response, the team leader must be consulted.
• Crossed out work should be marked UNLESS the candidate has
replaced it with an alternative response.
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Section A
Question Quantitative skills assessed Answer Mark
1 QS9: Interpret, apply and The only correct answer is B
analyse information in (1)
written, graphical, tabular A is not correct because an
and numerical forms economic good has an opportunity
cost
C is not correct because when
providing a public good other items
may be sacrificed
D is not correct because investing in
a capital good has an opportunity
cost in terms of consumer goods

2 QS9: Interpret, apply and The only correct answer is A

analyse information in (1)
written, graphical, tabular B is not correct because the excess
and numerical forms supply of permits will result in the
price decreasing
C is not correct because the cost of
buying permits will decrease
D is not correct because there is less
incentive to invest in cleaner
technology when permits are
cheaper

3 QS8: Make calculations of The only correct answer is D

elasticity and interpret the (1)
result A is not correct because there is no
QS9: Interpret, apply and information on income elasticity of
analyse information in demand
written, graphical, tabular B is not correct because substitute
and numerical forms goods have a positive XED
C is not correct because the value of
XED is not zero

4 QS4: Construct and The only correct answer is C

interpret a range of (1)
standard graphical forms A is not correct because the PED will
QS8: Make calculations of be 0
elasticity and interpret the B is not correct because the PED will
result be between 0 and -1
QS9: Interpret, apply and D is not correct because the PED will
analyse information in be -infinity
written, graphical, tabular and
numerical forms
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5 QS2 Calculate, use and The only correct answer is B

understand percentages, (1)
percentage changes and A is not correct because Denmark
percentage point changes generated more non-renewable
QS9: Interpret, apply and resources in 2010 and more
analyse information in renewable resources in 2021
written, graphical, tabular C is not correct because a higher
and numerical forms proportion of electricity was
generated from non-renewable
resources in 2010
D is not correct because a higher
proportion of electricity was
generated using renewable
resources in 2021
6 QS2 Calculate, use and The only correct answer is A
understand percentages, (1)
percentage changes and B is not correct because the supply
percentage point changes of new houses would decrease
QS8: Make calculations of C is not correct because the supply
elasticity and interpret the of new houses would decrease
result D is not correct because the PES has
QS9: Interpret, apply and been divided by the price change
analyse information in
written, graphical, tabular
and numerical forms
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Section B
Question With reference to the house rental market in Brisbane, draw a diagram Mark
to illustrate the introduction of a maximum price for renting a house.

Answer
7 Knowledge 1, Application 3
Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.

Knowledge

1 mark for showing knowledge on diagram

• Original supply and demand with correctly labelled axes (1)

Application
Up to 3 marks for the following information included on diagram:
• Maximum price below equilibrium price (1)
• QD and QS at maximum price (1)
• Excess demand/shortage (1)

N.B. The market equilibrium is not necessarily required

(4)
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Question With reference to hotel breakfasts, explain why the above information Mark
illustrates ‘diminishing marginal utility’.

Answer
8 Knowledge 1, Application 1, Analysis 2
Quantitative skills assessed:
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge

1 mark for understanding of ‘diminishing marginal utility’

• Where an additional unit of consumption leads to a smaller
increase in utility/ where the marginal utility
decreases/total utility increases but at a slower rate (1)

Application

1 mark for reference to data

• 80% of hotel guests go to the buffet three times /

Only 10% visit five times (1)

Analysis

Up to 2 marks for analysis e.g.

• 90% of hotel guests are satiated/full after consuming the

4th bowl/plate of food (1) so do not consume the 5th
bowl/plate (1)
• The last bowl/plate of food consumed increases total utility
(1) but the gain in utility is smaller than for the last bowl
(1)

(4)
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Question With reference to lighthouses, explain the difference between Mark

‘non-rivalry’ and ‘non-excludability’.

Answer
9 Knowledge 2, Application 2
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge
1 mark for definition of non-rivalry e.g.:
• Where the consumption by one person does not reduce the
benefit for another person/ where people can consume a
good without affecting the benefit derived by others (1K)
1 mark for definition of non-excludability e.g.:
• Where you cannot prevent another person from consuming
the same good / when it is impossible to provide a good
without others being able to benefit from it (1K)

Application
Up to 2 marks for applying to stem e.g.:
• 24 300 lighthouses globally /
Number of losses of ships at sea reduced from 109 to 38
(1AP)
• Lighthouses are a public good (1AP)
• The consumption of light from a lighthouse by one ship does
not reduce the light available to other ships at sea (1AP)
• One ship’s consumption of light does not exclude/prevent
another ship consuming the same light (1AP)
(4)
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Question Ceteris paribus, calculate the income elasticity of demand for new cars. Mark
Show your workings.

Answer
10 Knowledge 1, Application 3
Quantitative skills assessed:
QS2 Calculate, use and understand percentages, percentage
changes and percentage point changes
QS8: Make calculations of elasticity and interpret the result.
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms

Knowledge
1 mark for definition/the formula income elasticity of demand
% change in quantity demanded
% change in income (1)

Application
Up to 3 marks for calculations:
• Change in quantity of car sales
23.56m – 21.52m = 2.04
Change in quantity ÷ original quantity x 100
2.04m ÷ 21.52m x 100= 9.48% (1) 9.4795539033

• Change in income
114 029 – 106 837 = 7 192
Change in income ÷ original income x 100
7 192 ÷ 106 837 x 100= 6.73% (1) 6.7317502363

% change in quantity demanded

% change in income

9.48 ÷ 6.73
= + 1.41 (1)

Accept reasonable rounding e.g.

9.5 ÷ 6.7
= +1.42

NB: if correct answer (e.g. 1.41, 1.409, 1.4086, 1.408,

1.408186, 1.42) is given, award full marks regardless of
working.
Accept reasonable rounding from full calculation
If 1.41% or -1.41 is given award 3 marks
(4)
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Question Ceteris paribus, explain the likely impact of this change in Mark
supply on the consumer surplus in the tomato market.

Illustrate your answer with a supply and demand diagram.

Answer
11 Knowledge 1, Application 1, Analysis 2
Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge
1 mark for definition of consumer surplus e.g.:
• The difference between the market price and the price at which
the consumers are willing to buy/pay (1)

Application
1 mark for correct shift of supply to the left (1)

Accept perfectly inelastic supply curves for each year

Analysis
Up to 2 marks for showing the change in consumer surplus
Original consumer surplus GHPe (1)
New consumer surplus GFP1 (1)
OR
Consumer surplus decreases (1) by FHPeP1 (1)

(4)
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Section C
Question Define the term ‘capital goods’. (Extract C, line 5) Mark

Answer
12 (a) Knowledge 2
Up to 2 marks for understanding of ‘capital goods.’ e.g.:
• Man-made aids to production (1)
• Used in the production of other capital goods or consumer
goods (1)
• Spending on machinery/buildings/vehicles (1)
• Goods that increase productive potential /shifts PPF to the right
(1)
• Indian Government subsidies are used by farmers to invest in
capital goods (1)
(2)
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Question With reference to Figure 1 and Extract A, analyse two reasons why the Mark
price of rice increased between July 2022 and July 2023.
Illustrate your answer with a supply and demand diagram.
Answer

12 (b) Knowledge 2, Application 2, Analysis 2

Quantitative skills assessed:
QS4: Construct and interpret a range of standard graphical
forms
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.
Knowledge
Up to 2 marks for the diagram showing:
• Original supply, demand and equilibrium price and quantity
(1)
• New higher equilibrium price and quantity having only shifted
demand (1)

Analysis
Up to 2 marks for reasons from Extract A
• Rice consumption in Africa and Asia is growing rapidly (1)
• As populations grow/In 2022 the population grew by
2.45% in Africa and 0.83% in Asia (1)
• Incomes rose/ In 2022 the average economic growth rate
was 4% in Asia and 3.85% in Africa (1)
Application
1 mark for diagram and 1 mark for reference to Figure 1.:
• Shift demand curve to the right (1)
• Figure 1- price index rises from 108.4 to 129.7 between July
2022 and July 2023/ increased by over 19.6%/ 21.3 increase
in the index (1)

(6)
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Question With reference to Figure 2, explain whether demand for each of Mark
the four selected food groups is price elastic or price inelastic.
Answer
12 (c)
QS8: Make calculations of elasticity and interpret the result.
QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms.

Knowledge 2 Application 2

Knowledge
1 mark for definition of price elastic demand:
• A value between -1 and -∞/ a larger than proportional change in
quantity demanded to a change in price (1)

1 mark for definition of price inelastic demand

• A value between 0 and -1/ a smaller than proportional change in

quantity demanded to a change in price (1)

Application
Up to 2 marks for application:

• Demand for vegetables, fish and meat is price inelastic (1)

• Demand for rice is price elastic (1)
(4)
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Question With reference to Extract B, examine two external costs Mark

associated with rice production.
Answer
12(d) QS9: Interpret, apply and analyse information in written,
graphical, tabular and numerical forms
Knowledge 2, Application 2, Analysis 2, Evaluation 2

Knowledge and Analysis

2 knowledge marks for identifying external costs and 2 analysis
marks for linked explanation of each external cost, e.g.:
• Additional emissions may cause global warming (1K) this may
increase the risk of flooding as water levels rise/ increase the
risk of wildfires as global temperatures rise causing damage to
peoples’ homes (1AN)
• Rice production leaves less water in the natural environment
(1K) meaning animals and humans find it more difficult to find
water for consumption (1AN)
• Insecticides kill off insects/ bees reducing the amount of
honey/crops produced (1K) reducing the revenue and profits
of beekeepers/farmers (1AN)
• Respiratory problems (1K) resulting in additional health costs
to the individual and government (1AN)
• Up to 1 mark for definition of external costs or accurate
diagram showing external costs of production

Application
Up to 2 marks for external costs with application to Extract B
• 12% of global methane emissions/
1.5% of all greenhouse gas emissions/
Vietnam’s paddy fields produce more carbon emissions than its
transport network (1AP)
• 1 kg of rice requires 2 500 litres of water/
Rice uses 33% of the world's irrigation water (1AP)
• Insecticides resulted in a 44% decline in bee population in the
USA (1AP)

Evaluation
Up to 2 marks for evaluative comments (2+0 or 1+1), e.g.:
• 90% of rice is consumed within the country reducing emissions
from transporting rice (1)
• Difficult to quantify external costs, putting a value on the impact
on third parties e.g. farmers, bee keepers (1+1)
• Substantial impact e.g. 12% global methane emissions/2 500
litres of water (1+1)
• The external costs may only be experienced in the long-run as it
takes a long time for the third party impact to emerge e.g. climate
change (1+1)
• There may be external benefits, such as employment associated
with rice production (1+1)
• The magnitude of the external costs may be small as only 1.5% of
global emissions contributed by rice (1+1) (8)
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Question With reference to Extract C, discuss the benefits of subsidies paid to rice
growers.
Illustrate your answer with an appropriate diagram.

Indicative content
12(e) Indicative content guidance
Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates
may make but this does not imply that any of these must be included. Other
relevant points must also be credited.
Quantitative skills assessed
QS4: Construct and interpret a range of standard graphical forms
QS9: Interpret, apply and analyse information in written, graphical,
tabular and numerical forms.

Knowledge, Application and Analysis (8 marks) – indicative content

• Subsidies - cash grant to encourage production and consumption

• Reduces costs of production for rice growers
• Subsidy is used for capital goods, fertiliser and water
Subsidy diagram

Consumers
• Price paid lowers from Pe to P1
• Consumer surplus increases from ABPe to ACP1
• Quantity consumed increases from Qe to Q1

Producers
• Increase in amount received increases from 0Pe to 0G for each item sold
• Producers' revenue increases from 0PeBQe to 0GEQ1
• Producer subsidy is EFPeG
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• Producers increase quantity sold, from Qe to Q1

Government
• Increased welfare of its citizens as they can now access cheaper rice
• Popular amongst farmers
• Boosts export revenue income that can be used to buy capital goods and
other imports
• Boosts rice production creating economic growth

Workers
• Higher output, results in more workers being needed
• Creates more job security whilst the subsidy is paid
• Producers have more revenue so can afford to pay more
Level Mark Descriptor
0 No rewardable material
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding
of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate
examples.
Descriptive approach, which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in
the answer.
Chains of reasoning in terms of cause and/or consequence are evident
but they may not be developed fully or some stages are omitted.
Level 3 7–8 Demonstrates accurate and precise knowledge and understanding of
economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context using relevant
examples which are fully integrated to address the broad elements of
the question.
Analysis is clear, coherent, relevant and focused. The answer
demonstrates logical and multi-stage chains of reasoning in terms of
cause and/or consequence.
Evaluation (6 marks) – indicative content
• Magnitude- depends on the level of the subsidy set- if too low then little
impact on economic agents
Consumers
• Higher output may cause land to become less fertile and quality of the
rice to fall
• Will not benefit those that prefer varieties grown in other countries
• Depends on the proportion of rice that makes up an Indian consumer's
diet
Producers
• May become reliant on the subsidy
• May struggle if the subsidy is removed
• May see a decline in the quality of the crop and the amount they can
actually sell
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• Increased water use/fertiliser use reduces availability for farmers of

other crops

Government
• Spending by the government will be the area ECP1G, cost $6.9bn in 2021
• Opportunity cost- the money spent on rice subsidies cannot be used
elsewhere
• Removing the subsidies is difficult- resulted in mass protests and the
subsidy was reinstated
Workers
• If the subsidy is removed and output falls- risk of job losses
• May keep workers in low-skilled jobs for longer
Level Mark Descriptor
0 No rewardable material.
Level 1 1–2 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 3–4 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 5–6 Evaluation recognises different viewpoints and/or is critical of the
evidence.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.
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Section D
Question Evaluate possible factors that could cause a rightward shift of a country’s
production possibility frontier.
Include at least one relevant diagram in your answer.

Indicative content
13
Quantitative skills assessed
QS4: Construct and interpret a range of standard graphical forms

QS9: Interpret, apply and analyse information in written, graphical,

tabular and numerical forms.

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates may
make, but this does not imply that any of these must be included. Other relevant
points must also be credited.

Knowledge, application and analysis (12 marks) – indicative content

• PPF- shows the maximum possible production using all available resources

Factors that could cause a rightward shift of a country’s PPF

• Population increase from 9.4m to 14.1m (UAE)/12.1m to 18.8m
(Bolivia)/113.9m to 180.2m (Philippines) increases the size of the available
workforce
• More immigration- increases the size of the labour force and production
possibilities
• Offering more work visas, offer payments to migrants may encourage
immigration, increasing labour force
• Families having more children, will eventually result in larger workforce
• Use of benefits, subsidies and tax breaks to encourage families to have more
children, to increase workforce
• Investment in capital goods will increase productivity
• Use of subsidies and tax breaks to encourage investment in capital goods
• More research and development will result in better production processes
increasing output
• Encourage research and development- helping to improve innovation and
increasing productive potential
• Development of artificial intelligence may replace tasks completed by humans
• Increase spending on education to develop skills to improve productivity
• Increase spending on healthcare to improve health- reducing time lost to
absenteeism, sickness
• Increase retirement age so people stay in the labour market for longer
• Reduce school leaving age so that people start to become productive earlier
• Offer training courses to improve skills and productivity
• Discovery of new natural resources
PPF diagram- accept straight line or curved PPFs
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NB Award maximum of Level 3 if no diagram is included

Level Mark Descriptor
0 No rewardable material.
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding
of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate
examples.
Descriptive approach which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Limited application of knowledge and understanding to economic
problems in context.
A narrow response or superficial, only two-stage chains of reasoning in
terms of cause and/or consequence.
Level 3 7–9 Demonstrates accurate knowledge and understanding of economic terms,
principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in the
answer. Analysis is clear and coherent. Chains of reasoning in terms of
cause and/or consequence are evident but they may not be developed
fully or some stages are omitted.

Level 4 10–12 Demonstrates accurate and precise knowledge and understanding of

economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context, using appropriate
examples which are fully integrated to address the broad elements of the
question.
Analysis is clear, coherent, relevant and focused. The answer
demonstrates logical and multi-stage chains of reasoning in terms of
cause and/or consequence.
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Evaluation (8 marks) – indicative content

• Immigrating to a country may not be attractive if jobs are not available in the
right areas
• Immigration may cause pressure on public services
• If immigrants do not find suitable opportunities productive potential will not
rise
• Payments to migrants create an opportunity cost
• Financial rewards for having more children are unlikely to exceed the costs of
having more children
• Subsidies to encourage investment in capital goods create opportunity costs
• Much research and development is unproductive and not all ideas will improve
production possibilities
• Artificial intelligence may come with unknown risks and costs
• Spending on education may be in the wrong areas- resulting in smaller impact
on productive potential
• Increase in spending on healthcare will only have an impact if it is preventative
• Increasing the retirement age may cause unrest as people are forced to work
longer
• If people leave education earlier they may be less skilled
• Possible information failure, government failure if training is in wrong areas
• Time lag e.g. long delay between increased birth rate and increased production
possibilities

Level Mark Descriptor

0 No rewardable material.
Level 1 1–3 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 4–6 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 7–8 Evaluation recognises different viewpoints and/or is critical of the
evidence, leading to an informed judgement.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.
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Question Evaluate the likely impact of imposing indirect taxes on aeroplane flights
to reduce carbon emissions.
Include at least one relevant diagram in your answer.

Indicative content
14
Quantitative skills assessed
QS4: Construct and interpret a range of standard graphical forms

QS9: Interpret, apply and analyse information in written, graphical,

tabular and numerical forms.

Indicative content guidance

Answers must be credited by using the level descriptors (below) in line with the
general marking guidance.
The indicative content below exemplifies some of the points that candidates
may make but this does not imply that any of these must be included. Other
relevant points must also be credited.

Knowledge, application and analysis (12 marks) – indicative content

• Definition of indirect taxation- expenditure tax

• Specific tax/Ad valorem tax-
o Increase costs of production
o Shifts/pivots supply to the left, S to S1
o Increased equilibrium price charged to consumers Pe to P1
o Decreases equilibrium quantity of flights for consumers, Qe to Q1
o Reduced quantity of aeroplane flights will result in a reduction in
fuel use and in total global carbon emissions. Therefore there will
be a reduction in external costs
o Tax revenue received by the government ABCP1
o Use tax revenue to fund research into technology to reduce
emissions/ fund alternatives
o Producer surplus decreases/ airline/ airport profits fall
o Consumer surplus decreases FEPe to FCP1
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Accept ad valorem diagrams to illustrate the effects of the indirect tax

Accept externalities diagram to illustrate effects of indirect tax

NB Award maximum of Level 3 if no diagram is included

Level 4 requires at least two impacts
Advantages may be presented as KAA and disadvantages as EV or vice
versa
Level Mark Descriptor
0 No rewardable material.
Level 1 1–3 Displays isolated, superficial or imprecise knowledge and understanding
of economic terms, principles, concepts, theories and models.
Use of generic material or irrelevant information or inappropriate
examples.
Descriptive approach, which has no chains of reasoning.
Level 2 4–6 Displays elements of knowledge and understanding of economic terms,
principles, concepts, theories and models.
Limited application of knowledge and understanding to economic
problems in context.
A narrow response or superficial, only two-stage chains of reasoning in
terms of cause and/or consequence.
Level 3 7–9 Demonstrates accurate knowledge and understanding of economic
terms, principles, concepts, theories and models.
Ability to apply knowledge and understanding to some elements of the
question. Some evidence and contextual references are evident in the
answer.
Analysis is clear and coherent. Chains of reasoning in terms of cause
and/or consequence are evident but they may not be developed fully or
some stages are omitted.
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Level 4 10– Demonstrates accurate and precise knowledge and understanding of

12 economic terms, principles, concepts, theories and models.
Ability to link knowledge and understanding in context using
appropriate examples which are fully integrated to address the broad
elements of the question.
Analysis is clear, coherent, relevant and focused. The answer
demonstrates logical and multi-stage chains of reasoning in terms of
cause and/or consequence.
Evaluation (8 marks) – indicative content
• Depends on the size of the tax
• Highly inelastic demand for flights means relatively small impact on
quantity
• Different effects on those travelling for business/leisure
• Information failure- government may not know the ideal rate of taxation
• Government failure- if it leads to net welfare loss
• Any measures to reduce flights may be offset by increases in the number
of people using cars or lorries. Therefore, there may be little reduction in
external costs
• Following the global health crisis, significant numbers have continued to
work remotely-reduces the need to fly. Even without imposing indirect
taxes the total number of aeroplane flights is likely to have fallen below
2019 levels. Therefore, global carbon emissions may already be below
2.5%
Level Mark Descriptor
0 No rewardable material.
Level 1 1–3 Identification of generic evaluative comments.
No supporting evidence/reference to context.
No evidence of a logical chain of reasoning.
Level 2 4–6 Evidence of evaluation of alternative approaches.
Some supporting evidence/reference to context.
Evaluation is supported by a partially-developed chain of reasoning.
Level 3 7–8 Evaluation recognises different viewpoints and/or is critical of the
evidence, leading to an informed judgement.
Appropriate reference to evidence/context.
Evaluation is supported by a logical chain of reasoning.

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