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June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 40

SYLLABUS/COMPONENT: 0455/01
ECONOMICS
Paper 1 (Multiple Choice)
Page 1 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 1

Question Question
Key Key
Number Number
1 C 21 C
2 C 22 B
3 B 23 C
4 C 24 B
5 D 25 A

6 A 26 B
7 D 27 A
8 A 28 C
9 C 29 C
10 B 30 A

11 C 31 C
12 D 32 B
13 C 33 B
14 C 34 C
15 C 35 C

16 D 36 B
17 C 37 C
18 B 38 D
19 C 39 A
20 D 40 C

TOTAL 40

© University of Cambridge Local Examinations Syndicate 2003

June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 60

SYLLABUS/COMPONENT: 0455/02
ECONOMICS
Paper 2 (Core)
 Page 1 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 2

1 (a) Up to 4 marks for a definition that mentions the roles of price, demand, and
supply, a general lack of government intervention.
[4]

(b) Up to 2 marks each for an explanation of a complement and a substitute

together with an example. Complements might be new homes, furniture and
appliances. Substitutes might be homes rented from the state or owned by
the occupier.
[4]

(c) Up to 4 marks for any four acceptable factors, which might include income,
journey to work, skills required, hours of work, fringe benefits, location of job
and career prospects.
[4]

(d) Up to 3 marks for explaining the likely effect of the change in housing
provision on a worker’s choice of occupation. Workers are now more able to
choose jobs away from the place where they live, they may be prepared to
travel to find a more acceptable job in terms of hours, income and location.
They also need not to be tied to the job for a long time because of the
commitment to the accommodation. Different career options may be open to
them.
[3]

(e) Up to 5 marks for discussing whether those on reasonable incomes are likely
to benefit from being able to choose better housing in more pleasant areas by
taking advantage of the tax relief and loan offers. Those on lower incomes will
not be able to benefit from this. Some groups who were not eligible for their
own accommodation in the past will also benefit. Reward answers that
contain a good discussion.
[5]

2 (a) Up to 5 marks for describing factors such as prices, incomes, tastes,

advertising and the prices of complementary/substitute products.
[5]

(b) Up to 5 marks for a discussion of the likely spending patterns of poorer and
richer groups. Also, for a discussion of the proportion of income spent on
food, clothing, housing, leisure activities, transport and consumer durables.
[5]

3 (a) Up to 3 marks for a definition of the term mentioning the amounts of capital
used compared to the amounts of the other factors used.
[3]

(b) Up to 7 marks for a discussion of types of organisation, the extent of the

market, the type of production, the availability of resources, the ease of
substituting factors and the relative costs of production.
[7]

© University of Cambridge Local Examinations Syndicate 2003

 Page 2 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 2

4 (a) Up to 4 marks for explaining that more money spent on training might
increase productivity, make workers more efficient, make better use of
resources and reduce costs.
[4]

(b) Up to 6 marks for a discussion of the role of the government in providing

education and training, the possible area of market failure and the role of the
government in providing general education rather than specific education
relating to particular businesses.
[6]

5 (a) 1 mark each for ‘visible’ and ‘export’ or ‘trade in goods’ and ‘current account’.
[2]

(b) Up to 8 marks for a discussion of the relative merits of specialisation and

diversification. Specialisation would give increased efficiency but also greater
vulnerability; there would be no chance to protect industries or regions; there
would be more likelihood of sudden changes in international prices affecting
large areas of the economy.
[8]

© University of Cambridge Local Examinations Syndicate 2003

June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 40

SYLLABUS/COMPONENT: 0455/03
ECONOMICS
Paper 3 (Multiple Choice)
Page 1 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 3

Question Question
Key Key
Number Number
1 C 21 A
2 C 22 A
3 B 23 B
4 C 24 D
5 D 25 C

6 A 26 B
7 D 27 B
8 A 28 C
9 C 29 C
10 B 30 A

11 C 31 C
12 B 32 D
13 C 33 C
14 A 34 C
15 C 35 C

16 D 36 C
17 C 37 B
18 B 38 D
19 C 39 B
20 D 40 B

TOTAL 40

© University of Cambridge Local Examinations Syndicate 2003

June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 80

SYLLABUS/COMPONENT: 0455/04
ECONOMICS
Paper 4 (Structured Questions)
 Page 1 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 4

1 (a) Up to 4 marks for a definition that mentions the roles of price, demand, and
supply, a general lack of government intervention.
[4]

(b) Up to 2 marks each for an explanation of a complement and a substitute

together with an example. Complements might be new homes, furniture and
appliances. Substitutes might be homes rented from the state or owned by
the occupier.
[4]

(c) Up to 4 marks for any four acceptable factors, which might include income,
journey to work, skills required, hours of work, fringe benefits, location of job
and career prospects.
[4]

(d) Up to 3 marks for explaining the likely effect of the change in housing provision
on a worker’s choice of occupation. Workers are now more able to choose
jobs away from the place where they live, they may be prepared to travel to
find a more acceptable job in terms of hours, income and location. They also
need not to be tied to the job for a long time because of the commitment to
the accommodation. Different career options may be open to them.
[3]

(e) Up to 5 marks for discussing whether those on reasonable incomes are likely
to benefit from being able to choose better housing in more pleasant areas by
taking advantage of the tax relief and loan offers. Those on lower incomes will
not be able to benefit from this. Some groups who were not eligible for their
own accommodation in the past will also benefit. Reward answers that
contain a good discussion.
[5]

2 (a) Up to 5 marks for describing factors such as prices, incomes, tastes,

advertising and the prices of complementary/substitute products.
[5]

(b) Up to 5 marks for a discussion of the likely spending patterns of poorer and
richer groups. Also, for a discussion of the proportion of income spent on
food, clothing, housing, leisure activities, transport and consumer durables.
[5]

(c) Up to 5 marks for an explanation of price elasticity of demand and a

description of differing changes in demand for a given price change
depending on the value of the elasticity.
[5]

(d) Up to 5 marks for a comment on type of items mentioned, for discussing

whether all items are considered similar luxuries and therefore whether the
price elasticity of demand might be the same, and for a discussion of differing
elasticities for items such as ‘designer’ clothing and clothing without named
labels.
[5]

© University of Cambridge Local Examinations Syndicate 2003

 Page 2 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 4

3 (a) Up to 3 marks for a definition of the term mentioning the amounts of capital
used compared to the amounts of the other factors used.
[3]

(b) Up to 7 marks for a discussion of types of organisation, the extent of the

market, the type of production, the availability of resources, the ease of
substituting factors and the relative costs of production.
[7]

(c) 1 mark each for listing any three advantages of producing overseas, which
might include cheaper labour, lower transport costs, government incentives in
the host country, saving on costs of inputs or on the rent of land, closeness to
the market for the product and tax incentives.
[3]

(d) Up to 7 marks for a discussion of the effect on GNP, which could mention the
effect of employment and hence spending, the effect on the growth of
ancillary industries, the effect on balance of payments, and the effect on
government policy, as the government may be able to divert expenditure to
other projects if unemployment declines and there may be associated growth
in those areas. Reward candidates who give a good discussion.
[7]

4 (a) Up to 4 marks for explaining that more money spent on training might
increase productivity, make workers more efficient, make better use of
resources and reduce costs.
[4]

(b) Up to 6 marks for a discussion of the role of the government in providing

education and training, the possible area of market failure and the role of the
government in providing general education rather than specific education
relating to particular businesses.
[6]

(c) Up to 4 marks for an explanation of how a merger might lead to a different use
of resources to produce the best possible outcome. Candidates will probably
discuss this in terms of the cheapest cost per unit of output.
[4]

(d) Up to 6 marks for explaining whether large businesses might have a possible
reduction in average costs but might not necessarily produce a lower price,
and for discussing the benefits of lower costs against a lack of competition,
possible higher profits and higher prices, lower service and less choice.
[6]

5 (a) 1 mark each for ‘visible’ and ‘export’ or ‘trade in goods’ and ‘current account’.
[2]

(b) Up to 8 marks for a discussion of the relative merits of specialisation and

diversification. Specialisation would give increased efficiency but also greater
vulnerability; there would be no chance to protect industries or regions; there

© University of Cambridge Local Examinations Syndicate 2003

 Page 3 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 4

would be more likelihood of sudden changes in international prices affecting

large areas of the economy.
[8]

(c) Up to 4 marks for explaining the difference between value and quantity. An
increase in value could be achieved with a lower quantity if the price rose and
demand was inelastic.
[4]

(d) Up to 6 marks for a discussion of the possibility of limiting exports to keep

prices high. This depends upon competition in the same market, whether
there might be collusion or agreement with other producers and whether other
producers can be monitored to keep to such agreements.
[6]

6 (a) Up to 3 marks for a description of private sector and public sector expenditure
with relevant examples.
[3]

(b) Up to 3 marks for explaining how public expenditure falls as the economy
relies more on the market system. The government has less influence over
production, employment and distribution in a market economy. Examples in
each area could be given.
[3]

(c) Up to 8 marks for explaining how government expenditure can be paid for by
taxes and duties, revenue from state owned operations and borrowing.
[8]

(d) Up to 2 marks for a definition of opportunity cost in terms of the value of the
next best alternative that is sacrificed when a choice is made. Up to 4 marks
for a discussion of the effects of directing expenditure to a particular area at
the expense of another. Candidates could use macro examples, such as
reducing unemployment and reducing taxes, or micro examples such as
expenditures on a hospital, a road or an airport.
[6]

7 (a) Up to 6 marks for an explanation of the types of facilities, income levels,

employment and services available in each economy. Reward candidates
who recognise that the general descriptions applied to these economies are
descriptions of the average person, which conceal a range of wealth and
income differences.
[6]

(b) Up to 6 marks for explaining that it depends on whether the resources are
exploited and conserved, whether the income is distributed, to whom it is
distributed and whether the exploitation is by the local people or by a
multinational company.
[6]

© University of Cambridge Local Examinations Syndicate 2003

Page 4 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 4

(c) Up to 8 marks for a discussion of the effects of government policy on the

redistribution of wealth and income through taxation, regulation and monetary
policies together with the provision of services and facilities at subsidised
rates.
[8]

© University of Cambridge Local Examinations Syndicate 2003

June 2003

INTERNATIONAL GCSE

MARK SCHEME

MAXIMUM MARK: 40

SYLLABUS/COMPONENT: 0455/06
ECONOMICS
Paper 6 (Alternative to Coursework)
 Page 1 Mark Scheme Syllabus Paper
IGCSE EXAMINATIONS – JUNE 2003 0455 6

1 (a) (i) Any 2 characteristics related to employment, income, population,

infrastructure, health, education, housing, trade.
[2]

(ii) 840 types of fish, 400,000 workers, exported 250,000 tons, earnings
$633m.
[3]

(iii) visible export, current account.

[2]

(b) (i) Spanish and Portuguese could fish in Moroccan waters for fee.
[1]

(ii) Fishing is important to Morocco. The agreement has depleted the source
of income for 400,000 workers. If it continues their jobs would be at risk
and the economy would suffer.
[3]

(c) (i) Increase in supply. 1 for labels, 1 for shift, 1 for equilibrium, 2 for
explanation.
[5]

(ii) Discover the effect on prices, on sales, on profits, on employment, on

effect on subsidiary occupations. Comparison required with the situation
when the agreement was in force.
[6]

(d) Evidence for: stocks of fish were reduced by the agreement, employment
has been at risk (and, implied but not stated, incomes have been
reduced). Portuguese and Spanish were helped by the EU.

Evidence against: a fee was paid for the agreement. (No details of the
amount or whether it was sufficient to compensate for loss of fish.)
Situation is now recovering and fishermen are benefitting, consumers
have a wider choice.

Need to form overall conclusion.

[5]

2 (a) Sustained general increase in price level.

[2]

(b) Explanation of selection of base year, of weights, of items to be included,

of choice of trade outlets to obtain the information, of consumption
patterns. Comment on collection of data of household expenditure.
[7]

(c) Discussion of the figures. Could point out the overall rate is high, could
select particular items, could comment on the rates of inflation for basic
necessities, for food, for household goods. Candidates could discuss the
effect of import inflation on the balance of payments and international
competitiveness. Some overall comment should be made.
[6]

© University of Cambridge Local Examinations Syndicate 2003

Grade thresholds taken for Syllabus 0455 (Economics) in the June 2003 examination.

maximum minimum mark required for grade:

mark
A C E F
available
Component 1 40 - 24 16 14
Component 2 60 - 30 17 13
Component 3 40 35 26 17 -
Component 4 80 53 39 27 -
Component 5 80 64 46 32 24
Component 6 40 29 18 12 9

The threshold (minimum mark) for B is set halfway between those for Grades A and C.
The threshold (minimum mark) for D is set halfway between those for Grades C and E.
The threshold (minimum mark) for G is set as many marks below the F threshold as the E
threshold is above it.
Grade A* does not exist at the level of an individual component.