Practise IB Economics SL 2.7.3 by analysing how intervention changes prices, quantities, stakeholders, efficiency, equity and welfare with marked exam evidence.
Using real-world examples, evaluate the effects for stakeholders of a government imposing an indirect tax on a particular good.
Answers may include:
- Terminology: indirect tax, stakeholders
- Explanation: that the tax will shift the supply curve to the left/upwards, increase the price and reduce the quantity demanded/supplied;
explanation of the possible consequences for consumers, producers, workers, the government and society as a whole
- Diagram: a demand and supply diagram showing the impact of a shift of the supply curve to the left increasing price and reducing quantity demanded/supplied
- Synthesis (evaluate): the importance of PED and PES, the impact on resource allocation and allocative efficiency, whether the tax is specific or ad valorem, the regressive nature of indirect tax and the extent of the increase in taxation
- Examples: use of real-world examples to show instances of indirect taxes being imposed on goods.
A maximum of [9] should be awarded if only one stakeholder is mentioned.
Examiners should be aware that candidates may take a different approach which, if appropriate, should be rewarded.
N.B. It should be noted that definitions, theory and examples that have already been given in part (a), and then referred to in part (b), should be rewarded.
Assessment Criteria
Marks
Level descriptor
0
- The work does not reach a standard described by the descriptors below.
1-3
- 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.
- The response contains no evidence of synthesis or evaluation.
- A real-world example(s) is identified but it is irrelevant.
4-6
- The response indicates some understanding of the specific demands of the question.
- Relevant economic theory is described.
- Some relevant economic terms are included.
- The response contains evidence of superficial synthesis or evaluation.
- A relevant real-world example(s) is identified.
7-9
- 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.
- The response contains evidence of appropriate synthesis or evaluation but lacks balance.
- A relevant real-world example(s) is identified and partly developed in the context of the question.
10-12
- 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.
- The response contains evidence of appropriate synthesis or evaluation that is mostly balanced.
- A relevant real-world example(s) is identified and developed in the context of the question.
13-15
- 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.
- The response contains evidence of effective and balanced synthesis or evaluation.
- A relevant real-world example(s) is identified and fully developed to support the argument.