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Question 22N.1.SL.TZ0.1a

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Date November 2022 Marks available [Maximum mark: 10] Reference code 22N.1.SL.TZ0.1a
Level SL Paper 1 Time zone TZ0
Command term Explain Question number a Adapted from N/A
a.
[Maximum mark: 10]
22N.1.SL.TZ0.1a
(a)

Explain two forms of government intervention in markets.

[10]

Markscheme

Marks should be allocated according to the paper 1 markbands for May 2022 forward, part A.

Answers may include:

  • Terminology: government intervention, markets.
  • Theory: explanation of any two of the following forms of government intervention: price ceilings (maximum prices), price floors (minimum prices), indirect taxes, subsidies, direct provision of services, command and control regulation and/or legislation. An import tariff intervention and related diagram is equally rewarded.
  • Diagram: showing how governments intervene in markets (price ceilings, price floors, indirect taxes and/or subsidies).

A maximum of [6] should be awarded if only one form of government intervention is explained.

Examiners report

This question was done well by the majority of students. Responses covered maximum and minimum prices along with taxes and subsidies. Good answers used effective diagrams with clear explanations that showed a pleasing level of understanding of the microeconomic theory associated with government intervention in markets.

Syllabus sections