EcoHL P3 N04 TZ0 M

EcoHL P3 N04 TZ0 M - MARKSCHEME November 2004 ECONOMICS...

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Unformatted text preview: MARKSCHEME November 2004 ECONOMICS Higher Level Paper 3 11 pages N04/330/H(3)M INTERNATIONAL BACCALAUREATE BACCALAURAT INTERNATIONAL BACHILLERATO INTERNACIONAL c This markscheme is confidential and for the exclusive use of examiners in this examination session. It is the property of the International Baccalaureate and must not be reproduced or distributed to any other person without the authorization of IBCA. 2 N04/330/H(3)M SECTION A Data Response: Paper-Specific Markscheme Award up to the maximum marks available. Question 1 50 yen burger means new price war in Tokyo Maximum Mark Partial Mark (a) What is meant by the following words printed in bold in the text? 2 2 1 1 (i) price war * a situation in which companies try to undercut each others prices * for mention of oligopoly * for mention of overcapacity or market share 2 1 2 (ii) recession * for the idea that there is a fall in GDP or * at least two consecutive quarters of negative growth 4 2 2 (b) Using a supply and demand diagram, explain how the discovery of mad cow disease in Japan affected the market for hamburgers. y for a properly labelled diagram, showing a shift of the demand curve to the left y for an explanation that there will be a fall in demand for hamburgers and so fewer will be demanded and supplied at a lower price 5 1 2 2 3 (c) Given the pricing strategy chosen by McDonalds what can you conclude about McDonalds view of the price elasticity of demand? Illustrate your answer with a diagram. y for mention that they have cut prices y for understanding that they expect elasticity to be elastic y for realizing that if elasticity is elastic, then total revenue will rise when the price is dropped y for a correctly labelled diagram, showing demand and total revenue If no diagram is attempted then the maximum is [3 marks] . 3 N04/330/H(3)M 1 (d) (i) Which market structure is most closely represented by the fast food market in Japan? Oligopoly or monopolistic competition. 4 2 2 2 2 2 (ii) Justify your answer using evidence from the text. Evidence for oligopoly may be: y a few large firms dominating the market y reference to a price war y elements of price leadership. Evidence for monopolistic competition may be: y large number of firms y slightly differentiated products. (e) Using information from the text and your knowledge of economics, evaluate the possible outcome of a price war in the Japanese fast food industry. Points that may be raised could include: y consumers may gain from lower prices y consumers may gain from non-price competition y firms will lose short-run profits y some firms will be forced out of the industry y a movement towards monopoly y government may lose indirect tax revenue from lower prices y employees may suffer wage cuts or job cuts y foreign producers will sell more beef, so imports rise y any other reasonable answer....
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This note was uploaded on 02/12/2010 for the course ECON 201 taught by Professor Smith during the Spring '10 term at Whittier.

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EcoHL P3 N04 TZ0 M - MARKSCHEME November 2004 ECONOMICS...

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