Economics Paper 3a - Ms - 33

UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
International General Certificate of Secondary Education
MARK SCHEME for the October/November 2010 question paper

for the guidance of teachers
0455 ECONOMICS
0455/33 Paper 3 (Analysis and Critical Evaluation),
maximum raw mark 40
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of
the examination. It shows the basis on which Examiners were instructed to award marks. It does not
indicate the details of the discussions that took place at an Examiners’ meeting before marking began,
which would have considered the acceptability of alternative answers.
Mark schemes must be read in conjunction with the question papers and the report on the
examination.
• CIE will not enter into discussions or correspondence in connection with these mark schemes.
CIE is publishing the mark schemes for the October/November 2010 question papers for most IGCSE,
GCE Advanced Level and Advanced Subsidiary Level syllabuses and some Ordinary Level
syllabuses.
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Page 2 Mark Scheme: Teachers’ version Syllabus Paper
IGCSE – October/November 2010 0455 33
1 (a)
D1
D
S
Price
of
gas
P1
D1
S D
0 Q Q1 Quantity of gas
1 mark for labels.

1 mark for a shift to the right of the demand curve.
1 mark for equilibriums. [3]
(b) Recognition that demand for shares may have fallen (1).
Explanation that lower demand may have been due to a cut in dividend paid (1).
Recognition that demand for gas was expected to fall in the future (1), which may reduce
profit and so Gazprom’s ability to pay high dividends in the future (1).
Explanation that Gazprom may have issued more shares (1) to finance expansion (1).
Recognition that share prices in general may have fallen (1) because of the global downturn (1).
Recognition that lower demand may have been due to Gazprom’s debts (1), as greater debts
would mean less to pay shareholders (1).
Recognition that higher supply may reduce prices (1) and if demand is inelastic may lower
revenue (1).
Note: maximum mark is 3. [3]
(c) (i) 1 mark for each of the two valid reasons, e.g. to finance investment expenditure, to
finance the take-over of another firm, to cover shortfall in revenue, to finance
running costs, to finance research and development. [2]
(ii) Up to 2 marks for examining the effect in the short term. It is likely to reduce profits (1) as
costs will rise (1).
Up to 2 marks for examining the effect in long term. Explanation of why it might
fall/explanation of why it might rise (1). Position more uncertain/may go either way (1).
[4]
(d) Reasons may include high pay, good working conditions, opportunity to use the latest
technology, status of working for the largest gas company, opportunity to work with other top
engineers, Gazprom is intending to expand so promotion chances may be increasing.
Up to 3 marks for one reason well explained.
2 marks for one reason reasonably well explained.
1 mark for each of the three reasons identified. [3]
© UCLES 2010

Page 3 Mark Scheme: Teachers’ version Syllabus Paper
IGCSE – October/November 2010 0455 33
(e) (i) Defining monopoly (1).

Clear judgement on position in Russia (1).
Clear judgement on position in Europe (1).
No information given on share of sales in other parts of the world so judgement cannot
be made on world market share (1).
Recognition that a monopoly can be defined in more than one way (1). [3]
(ii) Consumers may be disadvantaged as a result of high prices, poor quality, lack of choice
and lack of innovation. On the other hand, they may benefit from low prices due to low
costs arising from economies of scale, reliability of supply, large profits may lead to more
spending on research and development, which can lead to more innovation and better
quality.
Candidates should consider what needs to be assessed, e.g. how prices, costs, range of
products, profit and innovation might compare with a more competitive situation.
Up to 4 marks for one-sided view.
Up to 6 marks for two-sided view. [6]
2 (a) Generally yes (1). 4 countries with the lowest GDP per head have the lowest HDI values/four
countries with the highest GDP have the highest HDI (1). But South Africa has the highest
GDP per head but only the 4th highest HDI value (1) and Cuba has the third highest GDP
per head but the highest HDI (1), only a small selection of countries shown (1).
Note: maximum of 4 marks. [4]
(b) The HDI takes into account not just GDP per head but also life expectancy and adult
literacy/school enrolments (1).
A country’s population may have a relatively short life expectancy/poor health care (1) and
low adult literacy/school enrolments/poor education (1), especially if income distribution is
very uneven (1).
Note: maximum mark is 3. [3]
(c) (i) Idea of expected relationship (1), explanation of why poor countries receive most
aid/rich countries least aid (1).
Accept other valid relationships. [2]
(ii) Generally yes (1). Reference to an exception or the two exceptions (Bangladesh and
South Africa) (1). [2]
(d) Up to 3 marks for an explanation of how a rise in spending on health care may raise labour
productivity and so increase output and how it may raise total demand in the economy and
so create jobs. Higher government spending may involve an opportunity cost in the form of,
for example, lower spending on education.
Up to 5 marks for an explanation and judgement that outcome will depend on, for example,
how significant the rise in spending is, whether the spending improves the quality of health
care, what aspects of health care the spending is on and whether the spending is private or
public sector spending, that it may increase quantity or quality of labour force but if there is a
shortage of jobs available GDP may not rise, and that it may involve an opportunity cost. [5]
© UCLES 2010

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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

International General Certificate of Secondary Education

MARK SCHEME for the October/November 2010 question paper

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1 mark for labels.

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(e) (i) Defining monopoly (1).

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