Practise IB Economics SL 2.5.5 by explaining PED determinants and applying their importance to firm and government decisions, including pricing and taxation.
Explain three determinants of price elasticity of demand (PED).
Answers may include:
- definition of PED
- explanation of three determinants such as availability and closeness of substitutes, degree of necessity, percentage of income spent on the good, time
- diagram showing demand curves, which are relatively price elastic/inelastic
- examples of goods whose demand is price elastic/inelastic.
If only one determinant is explained, a maximum of level 2 ([6 marks]) may be awarded.
If only two determinants are explained, a maximum of level 3 ([8 marks]) may be awarded.
Assessment Criteria
Part (a) 10 marks
Level 0 (0 marks): The work does not reach a standard described by the descriptors below.
Level 1 (1-3 marks): 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.
Level 2 (4-6 marks): 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.
Level 3 (7-8 marks): 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.
Level 4 (9-10 marks): 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.