Practise IB Economics HL 2.5.6 by explaining PED differences between primary commodities and manufactured goods and their effects on export revenue and current-account pressures.
Explain two reasons why the demand for primary commodities might be price inelastic.
Answers may include:
- definitions of price inelastic demand, primary commodity, demand
- diagram to show price inelastic demand
- explanation of why the demand for primary commodities might be price inelastic that refers to two reasons for low price elasticity of demand, such as the lack of close substitutes, high degree of necessity and low proportion of income spent on the primary commodity
- examples of primary commodities with price inelastic demand.
Award a maximum of level 2 marks if a candidate has only explained one reason why the demand for primary commodities might be price inelastic.
Assessment Criteria
Part (a) 10 marks
Level ..... Marks
0 The work does not meet a standard described by the descriptors below. ..... 0
1 There is little understanding of the specific demands of the question. Relevant economic terms are not defined. There is very little knowledge of relevant economic theory. There are significant errors. ..... 1-3
2 There is some understanding of the specific demands of the question. Some relevant economic terms are defined. There is some knowledge of relevant economic theory. There are some errors. ..... 4-6
3 There is understanding of the specific demands of the question. Relevant economic terms are defined. Relevant economic theory is explained and applied. Where appropriate, diagrams are included and applied. Where appropriate, examples are used. There are few errors. ..... 7-8
4 There is clear understanding of the specific demands of the question. Relevant economic terms are clearly defined. Relevant economic theory is clearly explained and applied. Where appropriate, diagrams are included and applied effectively. Where appropriate, examples are used effectively. There are no significant errors. ..... 9-10