6EC01 01 PEF V2 Signoff PDF

Examiners’ Report
January 2013
GCE Economics 6EC01 01

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January 2013
Publications Code US034380
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© Pearson Education Ltd 2013
2 GCE Economics 6EC01 01

Introduction
General Comment
There was a strong response to the January 2013 exam paper by the vast majority of
candidates. This was demonstrated by many relevant and detailed answers. The paper also
differentiated effectively between the quality of responses.
Section A: supported multiple choice questions
Most candidates found this method of testing highly accessible. The quality of responses
varied enormously and a relatively high proportion achieved high marks of 28 or more. The
best answered questions were Q1 (Positive and normative statements), Q2 (Production
possibility frontier and economic growth) and Q4 (Price elasticity of demand and income
elasticity of demand for air travel); the least successful answers were Q3 (Movement toward
price equilibrium in a competitive market) and Q6 (Price elasticity of supply in the wheat
market).
The key to success involved defining the main economic concept in the question (usually
awarded 1 mark - but it could be up to 2 marks for two relevant economic concepts) and
applying appropriate economic theory and analysis (usually awarded up to 2 marks).
Annotation of the diagrams provided in any question is a good strategy, for example, Q3
(Market for maize) and Q7 (Market for vaccinations). In a similar vein, explicit use of the
data in Q4 (Price elasticity of demand and income elasticity of demand) offered scope for
candidates to gain marks. Other questions, such as Q6 (Price elasticity of supply of wheat)
and Q8 (Buffer stocks) gave an opportunity for candidates to introduce diagrammatic
analysis as a means of demonstrating their knowledge and application to the issues at hand.
A significant number of responses gained marks by eliminating incorrect options. Up to 3
marks were available for rejecting three incorrect options (providing that separate reasons
were offered). However, mixed success was achieved here. It required candidates to
explicitly state the option key being rejected and then to offer an appropriate explanation.
Several examples of how to successfully eliminate incorrect options are provided in the
report.
Note, it is perfectly acceptable to use a combination of techniques for securing the three
explanation marks, for example, explaining the correct answer, diagrammatic analysis and
eliminating one or more incorrect answers.
Section B: data response questions
Over half of the candidates selected Question 10 (The price of coal ) and with a smaller
amount opting for Q9 (North Atlantic fishing). Candidate performance was marginally
higher in Q9 compared to Q10. Some interesting areas of the specification were covered,
for example, Q9 gave candidates the opportunity to explore the meaning of a sustainable
resource with reference to fish stocks in the North Atlantic. Q10 offered the opportunity for
candidates to assess the benefits of a tradable pollution permit scheme.
Most responses offered some evaluative comments when required and so were credited
with marks. However, some responses were less successful in developing economic analysis
in the large mark base questions. This appeared to reflect a trend noted in the A2 exam
papers. Despite this, the quality of written communication offered plenty of scope for
candidates to develop their answers in a structured and coherent argument.
GCE Economics 6EC01 01 3

Question 1
This question offered a gentle introduction to the exam paper. Candidates were required to
distinguish between positive and normative statements with reference to the UK tax system.
Three-quarters of all candidates achieved full marks.

Examiner Comments
This answer achieved 4 out of 4 marks.

Correct option C (1 mark).
The definitions of positive and normative
statements (1+1 marks) were supported
with relevant application to the information
provided (1+1 marks). A maximum of 3
explanation marks is available.
Examiner Tip
Always refer to normative statements

as those based on 'value judgements'
which cannot be tested as true or false.

Examiner Comments
Correct option C (1 mark). Examiner Tip
Explanation of positive and normative Always use the information provided,

statements (1+1 marks). No explicit use of for example, statement 2 is normative
the information provided in the question. since it contains the word 'unfair'.

Question 2
This question proved to be highly accessible and almost two-thirds of candidates
achieved maximum marks.
This question proved to be highly accessible to the vast majority of candidates who achieved
high marks.

Examiner Comments
Correct option B (1 mark).
A definition of a production possibility frontier (1 mark) is supported
with an explanation of what may cause an outward shift in such a
curve - improved technology (1 mark).
Effective use of the rejection technique is offered to discount option
D (1 mark). Note how the candidate adds value by indicating that at
point Y there must be unemployment of resources.
Examiner Tip
Always state the option key being knocked-out
when using the rejection technique so that the
examiner can identify what you are trying to do.

Examiner Comments
Correct option B (1 mark). Examiner Tip
Identification that there has been economic growth since Define the key concept(s) in the question,
output of both capital and consumer goods increased (1 namely, production possibility frontier and
mark). Rejection of option D since there is a decrease in economic growth. This candidate missed
the utilisation of resources in moving from X to Y (1 mark). the opportunity of gaining full marks.

Question 3
Just one-sixth of candidates achieved full marks. A significant number of candidates
selected incorrect key 'A' and then proceeded to discuss the effects of a decrease in supply
and price. Unfortunately, this type of response was not relevant to the question. It is
important to carefully read the question instructions; it clearly states that the current price
is at P1 in a competitive market and then asks candidates what is the most likely outcome.
Relatively few candidates made the point that excess demand exists and so this is likely to
put pressure on the price to rise towards market equilibrium.

Examiner Comments

Correct response C (1 mark).
The candidate identifies an excess demand of Q1Q2 (1 mark) and then
explains how the price mechanism will lead to a rise in price to market
equilibrium Pe (1 mark). As the price rises so producers will supply more to
increase revenue (1 mark). The latter point is put in the form of a rejection
of option A - but either way it is worth a mark. Rejection of option B would
also be credited with a mark here but full marks have already been achieved.
Examiner Tip
Always take time to carefully read the question. It is

clear that the starting point is P1, where initially demand
exceeds supply in the market and so it is in disequilibrium.

Examiner Comments

The response refers to price increasing from P1 to Pe
because there is an excess demand (1+1 marks). This
is shown in the diagram. To secure a further mark some
explanation of the price mechanism is required, for example,
supply extends and demand contracts as price rises.

Question 4
Two-thirds of candidates secured full marks by defining the concepts of price and income
elasticity of demand and then offering some application of the data on air travel. There were
a variety of ways to secure the marks.
Examiner Comments

Correct option A (1 mark).
The answer begins with formulae for price elasticity
Examiner Tip
of demand and income elasticity of demand (1+1
marks). Then data is used to explain that demand It is acceptable to offer formulae as
is price inelastic since it is -0.6, so the percentage definitions of the different types of elasticity
change in demand is less than the percentage change when answering supported multiple choice
in price (1 mark). For good measure the candidate questions. However, do make sure the
then proceeds to reject option C (1 mark). Note a formulae are precise - all too often candidates
maximum of three explanation marks available. miss out a letter or forget the '%' sign.

Examiner Comments
Incorrect option B (0 mark).
The candidate successfully defines price and income
elasticity of demand (1+1 marks) but then becomes
confused in the application to the data on air travel.
Examiner Tip
Practise answering the supported choice multiple questions

with use of the data. Here, the candidate is unable to use
the data and so the answer becomes confused.

Question 5
Almost half of all candidates achieved full marks. This involved a definition of cross
elasticity of demand, recognition that substitutes have a positive relationship followed
by explicit application to the two types of mobile phones. A significant number of responses
successfully offered rejection techniques to support their case.

Examiner Comments

Correct option D (1 mark).
A definition of cross elasticity of demand (1 mark) is
supported with the idea that substitutes have a positive
XED (1 mark); explicit application to iPhones and Blackberry
phones is then made (1 mark). Finally, a simple but highly
effective rejection of option B is carried out (1 mark). Note
that a maximum of three explanation marks is available.
Examiner Tip
Always add value when offering a rejection comment.
In this case the candidate clearly identifies that 'B' is
incorrect since complementary goods have a negative
cross elasticity of demand.
However, if the rejection was something like 'B is wrong
since substitutes do not have a negative cross elasticity
of demand' - then no mark would be awarded.

Examiner Comments
This answer achieved 3 out of 4 marks Examiner Tip

Correct option D (1 mark). Always consider where the three explanation
The formula or definition of cross elasticity of marks are coming from. In this case another point
demand (1 mark) is supported with application, is required to gain full marks. Furthermore, there
namely, as the price of Apple iPhone increases the is no need to offer both the formula and definition
demand for RIM Blackberry increases (1 mark). of XED here since only one mark is available.

Question 6
This was a question in which many candidates confused the determinants of price
elasticity of supply with those of price elasticity of demand. Consequently, just a quarter of
candidates gained full marks. Note that a 'high' elasticity means elastic and a 'low' elasticity
means inelastic.

Examiner Comments
This answer achieved 4 out of 4 marks
A definition of price elasticity of supply is supported with
a clear explanation of the meaning of elastic supply (1+1
marks). Application to wheat is offered (if price increases,
supply can increase easily due to the large quantities being
stored that can be released on to the market) (1 mark).
Rejection of option B concerning the supply of new
houses is offered with reference to the time period and
price inelasticity (1 mark). Note a maximum of three
explanation marks is available.
Examiner Tip
Offer some application to question at hand. The

best responses recognised that large stockpiles of
wheat mean the commodity can easily be released
on to the market and so is price elastic in supply.

Examiner Comments
The formula of price elasticity of supply (1
mark) is supported with application to the
large stockpile of wheat available (1 mark).
Examiner Tip
The attempt to reject option 'A' is too limited.

The candidate needs to explain why IT
technicians typically have a low elasticity
of supply, namely, because of the long time
required to train them up in the skills required.

Question 7
This was a familiar question which offered candidates the opportunity to score marks by
annotating the externality diagram provided. Common mistakes that many responses
suffered from was to define external costs and discuss government failure - despite
the question being concerned with external benefits from vaccinations and market
failure. Furthermore, some candidates mislabelled the triangle of welfare gain or welfare
loss as the triangle of 'externalities'. Less than a third secured full marks.

Examiner Comments
Correct option B (1 mark).
The definitions of market failure and external benefits secured
1+1 marks. The answer then outlines a typical external benefit
from vaccinations (prevent illnesses being passed on) (1
mark). Rejection of option D is also accepted here (1 mark).
Note a maximum of three explanation marks is available.
Examiner Tip
Always offer some application to the market

at hand, for example, explain a typical
external benefit from the vaccination market.

Examiner Comments

Incorrect option D (0 mark).
A definition of positive externalities (1 mark) is
supported with application to the vaccination market
(1 mark). Annotation of the diagram to show the
triangle of welfare loss also scores (1 mark).
Examiner Tip
Read the question carefully - it mentions a
free market for vaccinations, so there is no
government intervention and so no reason
to select option D. The question is about
market failure not government failure.

Question 8
The quality of responses were significantly improved compared to previous attempts at
answering questions on this topic. Almost half of candidates achieved full marks. The very
best answers offered relevant diagrammatic analysis depicting the quantities of stock
purchased and released onto the wheat market by an agency. The common mistakes
included confusing the minimum and maximum price lines and also just repeating the
correct key without adding value to the answer.

Examiner Comments

Correct response D (1 mark).
Identification of a maximum and minimum price band (1
mark) is linked to the government purchasing stock when
there is an excess supply and adding to its stockpile,
only to release it when there is a shortage (1+1 marks).
Rejection marks would also be credited here.
Examiner Tip
A good example of how to reject option

B is shown (1 mark). The other two
rejection examples are also just about
sufficiently developed to warrant marks.

Examiner Comments

Correct option D (1 mark).
Examiner Tip
This is a high quality answer showing how
diagrammatic analysis can gain full marks! Be prepared to offer diagrammatic
(The ceiling and floor prices / areas of analysis. Marks are always awarded
agency spending / selling) (1+1+1 marks). when relevant to the question set.

Question 9 (a)
Most candidates understood that mackerel fish stocks were being consumed at a rate that
made them unsustainable. However, not many responses referred to sustainability in terms
of a resource that would be available for future generations at current rates of consumption.
Examiner Comments
The candidate explains the meaning of sustainable
resource (the idea of consuming it at a rate
which will ensure it is still available for future
generations) (2 marks). Application is then offered Examiner Tip
to mackerel fishing where the rate of consumption
exceeds the rate at which the fish can reproduce Follow the instructions in the question,
and so is no longer sustainable (2 marks). Good that is, refer to Extract 1. This is required
use is made of the extract information. to gain the application marks available.

Examiner Comments

The meaning of the term sustainable resource is
explained but no reference is made to mackerel fishing.
Examiner Tip
Make use of the information provided

as instructed by the question. It is a way
of gaining the application marks available.

Question 9 (b)
Most responses used global warming as one reason for declining fish stocks but failed to
expand upon this sufficiently. Quite often the two reasons were bundled into one point which
made it hard to distinguish between them. Relatively few answers offered diagrammatic
analysis such as a decrease in supply or an increase in demand for fish.

Examiner Comments
The first cause of the decrease in fish stocks is mismanagement
by government (1 mark) which is developed by referring to the
breakdown of the quota agreement and fish catches increasing
by 50% - beyond the level of a sustainable resource (2 marks).
The second cause is global warming (1 mark) which is
developed by explaining how the fish have migrated northwards
into the path of countries over-fishing. It is rounded off with
effective use of a demand and supply diagram (2 marks).
Examiner Tip
Be prepared to offer diagrammatic

analysis when relevant.

Examiner Comments
The first cause of declining fish stocks is referred to as
global warming (1 mark) which is developed to include the
fish migrating northwards to countries exceeding their fish
quotas and even using the fish as fertiliser (2 marks).
The second cause is the EU quota system (1 mark) which
is developed to explain how 30% of fish catches are
thrown back dead and cause the stock levels to decrease
without any tangible benefit (2 marks).
Examiner Tip
Always answer the question set and offer two
causes of the decrease in fish stocks over
recent years. Make these two points clear
and then use the information and your own
knowledge to develop them where possible.

Question 9 (c)
Over recent exam series there have been significant improvements to candidate answers
that require an externality diagram. It was pleasing to see this trend continue in the current
series with the external cost diagram applied to the context of mackerel fishing.
However, many candidates confused the external costs from over-fishing with private costs.
Also, evaluation tended to be limited and responses often strayed from the question by
discussing solutions to over-fishing such as fish farms. This was relevant to Q9(e) but not
Q9(c).

Examiner Comments
The extended definition of external costs (1+1 marks) is supported
with relevant diagrammatic analysis (4 marks). The external costs from
over-fishing is then explained in terms of the impact on the food chain
and loss of bio-diversity (2 marks).
Evaluation is then offered by discussing possible benefits of over-fishing
(2 marks) and the difficulty of quantifying and attaching a monetary
value to the external costs involved (2 marks). It is a good answer
which lacked one more evaluation point for example, discussion of the
accuracy of the official data on fish stocks and fish catches.
Examiner Tip
Try and maintain relevance throughout

and consider offering three evaluation
points for 14 mark-base questions.

Examiner Comments
The answer starts with a promising diagram and this scores 3
marks (need to identify the area of welfare loss to gain the extra
mark). The answer also implies that over fishing will mean mackerel
stocks are unsustainable and so represent an external cost (1
mark). The rest of the answer then considers solutions to over-
fishing, but unfortunately this is not relevant to the question set.
Examiner Tip
Focus on the question set. It is a good idea to read

all five questions before starting to answer the first
- since it offers a perspective on what is required
overall. It is easier to focus on the question set rather
than answer what is required elsewhere.

Question 9 (d)
Overall this question was well answered with many focusing on the potential
benefits from the government preventing fishing in 30% of UK coastal waters. The best
responses considered both the positive and negative economic effects over time.

Examiner Comments Examiner Tip
This answer achieved 10 out of 10 marks. Offer economic analysis in your answer - it
The candidate offers good economic analysis on the likely makes sense to use a demand and supply
economic effects to achieve the full 6 KAA marks, for diagram to demonstrate the likely economic
example, a decrease in fish catches, higher fish prices and effects of such fishing restrictions.
a fall in consumer surplus - all supported by a relevant
diagram (4 marks). By doing this it means fish stocks can
recover in the long term, especially since some 30% of the
waters are protected (2 marks).
Evaluation comes in the form of considering the problems
raised by the fishing ban, namely that fish may swim into
waters where there is no protection, the danger of illegal
fishing and the costs involved in policing the waters. These
ideas are sufficiently developed to award 2+2 marks. Overall
it is a well balanced answer.

Examiner Comments
This answer achieved 6 out of 10 marks

The candidate offers good economic analysis on the likely economic
effects to achieve 6 marks, for example, a decrease in the supply
of fish and an increase in price, supported by a relevant diagram (3
marks). Some recognition is made that fish can reproduce safely
from protecting 30% of the coastal waters (1 mark). Attention is
then drawn to the impact on jobs in the fishing industry (1 mark)
and how it might lead to an increase in demand for substitutes such
as meat and chicken (1 mark). The answer needs some evaluative
comments on whether the fishing exclusion zone would work.
Examiner Tip
Consider both the positive and negative

effects of government measures to
develop a balanced approach to answers.

Question 9 (e)
This was well answered overall and most responses included a relevant subsidy diagram and
evaluative comments. Considerable differentiation in the quality of answers occurred. The
weakest responses drew the subsidy diagram incorrectly or made no attempt at offering
one.

Examiner Comments
A definition of a subsidy (1 mark) is supported with a
relevant diagram (3 marks) and explanation of how it acts to
reduce production costs for fish farms (1 mark). The benefits
are then considered, for example, it encourages more
innovation and investment, the creation of employment in
remote communities and the protection of wild fish stocks (4
marks). All 8 KAA marks are gained.
Evaluation comes in the form of discussing the possible
impact on wild fish stocks and the gene pool if farmed fish
escape (2 marks); also the quality and taste of farmed fish is
discussed (2 marks); finally the issue of opportunity cost of the
government subsidy to fish farms is developed (2 marks).
Examiner Tip
Always complete diagrams accurately. In this case the

candidate has labelled most of the curves and axes correctly
as well as highlighting the area of government subsidy and
overall impact on price and quantity. The omission of labelling
the demand curve could have cost the candidate a mark. In
this case plenty of KAA marks have already been secured!

Examiner Comments
A definition of a subsidy (1 mark) is supported with a

relevant diagram (3 marks) and explanation of how it acts
to reduce production costs for fish farms (1 mark). Further
analysis comes in the final paragraph where the subsidy
might encourage more businesses to enter the industry and
reduce the external costs of over fishing the wild stocks (2
marks). Evaluation marks are secured by brief reference to
making fish farmers dependent on the subsidy (1 mark) and
opportunity cost of the subsidy to government (2 marks).
Examiner Tip
Try and develop the points made. For example, the candidate
could have gained more marks by developing the point about
fish farmers becoming dependent on the subsidy. Exploration
of how production costs could increase, productivity
decrease and inefficiency set in comes to mind here.

Question 10 (a)
This is a frequently asked question that tests candidate knowledge, understanding and
application of the price mechanism model from the extract information. It was pleasing
to report that the vast majority of responses offered a suitable diagram and explanation.
Nearly three-quarters achieved four or more marks out of the six marks available. The main
limitation was in those answers which only shifted the supply curve and failed to shift the
demand curve.
Examiner Comments

A fully labelled diagram depicts a decrease in supply and
an increase in demand with the original and final new
price equilibrium positions (4 marks). The reason for the Examiner Tip
decrease in supply (1 mark) and increase in demand (1
mark) is also offered. Finally, explicit use of the price data Always label the axes and curves in
shown on the first two lines of the answer is undertaken diagrams. Make explicit use of the
(1 mark). Note a maximum of 6 marks is available. price data in Figure 1 as instructed.

Examiner Comments
Explicit reference to price data (1 mark) is supported with
the reason for the decrease in supply (floods which has
damaged coal mines and railway lines) (1 mark). The
diagram gains 2 marks (the original demand and supply with
original equilibrium price / a decrease in the supply curve).
Examiner Tip
Be prepared to spend sufficient time on the
extract to explore whether there are further
reasons for the change in price of a commodity.
In this case, candidates are given help through
the instruction to look at one specific paragraph!

Question 10 (b)
This question was poorly answered and explains why the overall average score for data
response Q10 was slightly lower than for data response Q9.
The vast majority of responses incorrectly assumed that demand for coal is price inelastic
if an increase in its price leads to the same level of total revenue. Consequently most
candidates achieved just one mark for defining the concept price elasticity of demand.
Examiner Comments
A definition of price elasticity of demand (1 mark)
is supported with identifying that it is unitary elastic
since total revenue remains the same (1+1 marks).
A valid diagram is offered depicting equal total
revenue areas following the price change (2 marks).
Note a maximum of 4 marks is available.
Examiner Tip
Ensure a thorough understanding of the

relationship between price elasticity of demand
and total revenue. Be prepared to offer
diagrammatic analysis to support your answer.

Examiner Comments
The candidate states that price elasticity of
demand is unit elastic and so the change in price
has no effect on total revenue (1+1 marks).
Examiner Tip
Be prepared to extend the answer, for example,

by explaining the meaning of unit elastic
demand (the percentage change in demand is
the same as the percentage change in price).

Question 10 (c)
This was quite a challenging question since candidates were required to maintain focus
on the impact of higher Australian coal prices on UK electricity prices. Many responses
wandered away from the question by discussing the general effects of higher UK electricity
prices on the economy. Since the question was very specific it made sense to combine the
KAA and evaluation marks into a whole entity rather than breaking them down. This made
it easier for candidates to score marks. Even so, the mean mark was still less than half the
marks available.

Examiner Comments

The candidate starts with a data reference on the UK generating about
a quarter of its electricity by importing coal from overseas. Then s/he
considers the likely effects of higher coal prices (recognising it as a
cost of production) to the electricity generating firms. This is supported
with a diagram (3 marks).
Much economic analysis and evaluation is offered, for example,
discussion of price elasticity of demand (2 marks), short run and long
run differences in coal prices (1 mark), investment into alternative
energy sources (1 mark), the possible use of coal from elsewhere
rather than Australia (1 mark) and whether electricity firms could
actually absorb the higher production costs or cut production costs
elsewhere and so not change price (2 marks). There are clearly lots of
relevant points made which maintain focus on UK electricity prices!
Note an attempt has been made to break down the individual marks
too but often this approach loses the 'gestalt' or overview of the
answer. Clearly, this response is of a high quality and merits full marks.
Examiner Tip
Read the question instructions carefully in order to maintain
focus - namely, how an increase in Australian coal prices
might affect UK electricity prices. Far too many responses
wandered off the point and discussed the general effects of
higher electricity prices on the UK economy.

Examiner Comments

Higher coal prices will increase production costs for electricity firms and
so lead to higher electricity prices - this is supported with a diagram (3
marks). Discussion of the amount of coal imported from Australia then
made (2 marks).
This is followed by discussion of possible short run and long run effects
in the final paragraph (3 marks). The Australian floods may clear and
so coal prices fall back to normal levels - suggesting electricity prices
might not rise much at all. Also demand for electricity is price inelastic
so firms can simply increase price and revenues.

Question 10 (d)
This was the first time a question had been set on tradable permits in the data response
section of the paper. The quality of answers varied enormously from well-informed, coherent
arguments that considered both the benefits and limitations, to very weak responses which
had little idea of the meaning of tradable pollution permits. One common mistake was for
candidates to misinterpret the question and concentrate on the benefits of a reduction in
carbon emissions rather than the effectiveness of a system of tradable pollution permits
to reduce carbon emissions. Many answers also offered an externality diagram but did
not show the impact of such permits on the market.

Examiner Comments

The 8 KAA marks are gained by: data use from the extract of how
important Australia is in terms of global emissions (1 mark), how
the permits can internalise external costs of pollution (1 mark),
explaining the benefits of tradable permits, for example, creation
of a market with incentives for firms to reduce carbon emissions
in order to sell their spare permits and make a profit (2 marks),
diagrammatic analysis depicting a shift in marginal private costs
towards marginal social costs (assuming firms have to pay for
the permits) (2 marks), possible benefits to the government from
selling some of the pollution permits (2 marks).
Evaluation is revealed in the discussion on the limitations, for
example: problems calculating the amount of permits needed to
reach a socially efficient equilibrium (2 marks), the possibility that
firms with high profit margins can simply buy up spare permits
rather than cut back on pollution (2 marks) and consideration of
the scheme in relation to the absence of global agreements and its
impact on Australian industry's competitiveness (2 marks).
Examiner Tip
For the 14 mark base questions, try

and develop three evaluative comments.

Examiner Comments
Another high quality answer where all 8 KAA marks are just about gained: an explanation of carbon
permits (2 marks) is supported with advantages such as internalising external costs through the
funds raised by government being used to clean up or pay compensation to victims (2 marks); an
incentive for firms to reduce their pollution and use new techniques in production - moreover, firms
can bank their excess permits for use later and it is a highly flexible scheme (up to 4 marks).
The evaluation is very good and comes in the form of problems in monitoring the pollution emissions
(2 marks), issues surrounding the granting of 94.5% of permits free to firms (2 marks) and the
possibility that Australian firms may become less competitive since it is not a global scheme (2
marks).
Examiner Tip
Try and extend the economic analysis in large mark base questions - all too
often it is too brief and lacking in points. This response only just scrapes the
8 KAA marks. Discussion of how the scheme could be extended to countries
in South east Asia or how dirty polluting firms are put at a competitive
disadvantage compared to cleaner firms would have helped here.

Question 10 (e)
This was another question which differentiated effectively in the quality of answers. They
ranged from a sophisticated analysis and evaluation of government training programmes
and relocation subsidies through to very basic answers which just repeated points in the
extract. One fairly common mistake involved confusing mobility with immobility of labour.
Another common error involved discussing mobility of labour with no reference to coal
mining.

Examiner Comments
Definitions of occupational and geographical immobility of labour are initially
made (1+1 marks). An explanation of Government training programmes to
increase occupational mobility of labour is then developed (with reference
to skills in coal mining not being transferable) (2 marks). This is followed by
several evaluative comments concerning opportunity cost, their suitability for
coal miners and whether there are jobs available on completion (5 marks)
On the second page the focus switches to relocation subsidies as a
measure to increase geographical mobility of labour. Housing subsidies are
investigated with the use of a diagram and how they work (1+3 marks).
Evaluation is then undertaken by suggesting that workers may not want to
relocate because of family and friends (1 mark).
Overall, the answer just about warrants full marks.
Examiner Tip
Be prepared to apply to the context. This candidate

is quite lucid in exploring the effectiveness of
training programmes for coal miners.

Examiner Comments
Up to 6 KAA marks are gained by explaining occupational

and geographical mobility of labour and the use of training
programmes and relocation subsidies to improve them.
The maximum 6 evaluation marks are gained by discussing the
opportunity cost to the government of the training programmes,
their quality, the size of relocation subsidies and whether they
could compensate for people leaving family and friends behind.
Examiner Tip
The quality of written communication is taken into account

on the high mark base questions that have an asterisk. It
is very important to use good written communication and
presentation. This includes making use of paragraphs to
make it easier to digest the analysis and argument. In this
case the candidate could have broken up the answer better.

Paper Summary
Based on their performance on this paper, candidates are offered the following advice:
Section A: supported multiple choice
• Define accurately the key economic term used in each question.
• Be prepared to annotate the diagrams presented in the questions.
• Be prepared to draw diagrams when relevant to the question and make sure these are
properly labelled and explained in the text.
• Always refer to the information provided, for example, price and income elasticity of
demand figures. This helps to credit responses with application marks.
• Revise thoroughly the topic of market failure, especially positive and negative
externalities. This is an area where candidates often struggle to achieve high marks.
• Make sure value is added to answers which use the rejection method. There is no point
in simply stating that a particular option is incorrect without explaining why this is the
case.
Section B: data response
• Read the question instructions very carefully to make sure your answer remains relevant
throughout. All too often candidate answers strayed from the questions set as revealed
in Q9(c) on rising UK electricity prices and Q10(c) concerning the external costs from
over-fishing of mackerel.
• Focus on developing economic analysis in the high mark base questions. Quite often
candidates moved from definitions and a brief explanation of an economic issue straight
into evaluation. This was evident in Q9(e) on government subsidies to fish farms and
Q10(e) government measures to increase the mobility of labour. Economic analysis
typically involves explaining the sequence of events leading up to a particular outcome.

Grade Boundaries
Grade boundaries for this, and all other papers, can be found on the website on this link:
http://www.edexcel.com/iwantto/Pages/grade-boundaries.aspx

Further copies of this publication are available from
Edexcel Publications, Adamsway, Mansfield, Notts, NG18 4FN
Telephone 01623 467467

Fax 01623 450481
Email publication.orders@edexcel.com
Order Code US034380 January 2013
For more information on Edexcel qualifications, please visit

www.edexcel.com/quals
Pearson Education Limited. Registered company number 872828

with its registered office at Edinburgh Gate, Harlow, Essex CM20 2JE

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Examiners’ Report

GCE Economics 6EC01 01

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2 GCE Economics 6EC01 01

GCE Economics 6EC01 01 3

4 GCE Economics 6EC01 01

This answer achieved 4 out of 4 marks.

Always refer to normative statements

GCE Economics 6EC01 01 5

Explanation of positive and normative Always use the information provided,

6 GCE Economics 6EC01 01

GCE Economics 6EC01 01 7

8 GCE Economics 6EC01 01

GCE Economics 6EC01 01 9

10 GCE Economics 6EC01 01

This answer achieved 4 out of 4 marks.

Always take time to carefully read the question. It is

GCE Economics 6EC01 01 11

This answer achieved 3 out of 4 marks.

12 GCE Economics 6EC01 01

This answer achieved 4 out of 4 marks.

GCE Economics 6EC01 01 13

Practise answering the supported choice multiple questions

14 GCE Economics 6EC01 01

GCE Economics 6EC01 01 15

This answer achieved 4 out of 4 marks.

16 GCE Economics 6EC01 01

This answer achieved 3 out of 4 marks Examiner Tip

GCE Economics 6EC01 01 17

18 GCE Economics 6EC01 01

Offer some application to question at hand. The

GCE Economics 6EC01 01 19

The attempt to reject option 'A' is too limited.

20 GCE Economics 6EC01 01

GCE Economics 6EC01 01 21

Always offer some application to the market

22 GCE Economics 6EC01 01

This answer achieved 3 out of 4 marks.

24 GCE Economics 6EC01 01

GCE Economics 6EC01 01 25

This answer achieved 4 out of 4 marks.

A good example of how to reject option

26 GCE Economics 6EC01 01

This answer achieved 4 out of 4 marks.

GCE Economics 6EC01 01 27

28 GCE Economics 6EC01 01

This answer achieved 2 out of 4 marks.

Make use of the information provided

GCE Economics 6EC01 01 29

30 GCE Economics 6EC01 01

Be prepared to offer diagrammatic

GCE Economics 6EC01 01 31

32 GCE Economics 6EC01 01

GCE Economics 6EC01 01 33