Question 1
Explain why the price elasticity of supply (PES) for primary commodities is generally lower than the PES for manufactured products.
Answers may include:
- Terminology: PES, primary commodities, manufactured products.
- Explanation: of the PES for primary commodities being more inelastic (lower) than the PES for manufactured products in terms of factors such as the time period, the rate at which costs increase, mobility of factors of production, ability to store and unused capacity.
- Diagram: diagram(s) showing relatively elastic and inelastic supply curves.
Assessment Criteria
Part (a) 10 marks
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-2
- The response indicates little understanding of the specific demands of the question.
- Economic theory is stated but it is not relevant.
- Economic terms are stated but they are not relevant.
3-4
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
5-6
- The response indicates understanding of the specific demands of the question, but these demands are only partially addressed.
- Relevant economic theory is partly explained.
- Some relevant economic terms are used appropriately.
- Where appropriate, relevant diagram(s) are included.
7-8
- The specific demands of the question are understood and addressed.
- Relevant economic theory is explained.
- Relevant economic terms are used mostly appropriately.
- Where appropriate, relevant diagram(s) are included and explained.
9-10
- The specific demands of the question are understood and addressed.
- Relevant economic theory is fully explained.
- Relevant economic terms are used appropriately throughout the response.
- Where appropriate, relevant diagram(s) are included and fully explained.