Question 21M.1.HL.TZ1.1a
| Date | May 2021 | Marks available | [Maximum mark: 10] | Reference code | 21M.1.HL.TZ1.1a |
| Level | HL | Paper | 1 | Time zone | TZ1 |
| Command term | Explain | Question number | a | Adapted from | N/A |
Explain why governments impose price floors in the market for agricultural products.
[10]
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.
Answers may include:
- definition of price floor
- diagram showing the imposition of a price floor leading to higher prices and higher producer revenues
- explanation that governments impose price floors in the market for agricultural products to support producers by increasing producers’ revenues and/or improving producers’ ability to plan and invest for the future
- examples of specific agricultural markets where price floors have been imposed.
Many candidates used generic labelling of the diagrams (just P and Q) despite the question asking specifically about an agricultural product so the diagrams, while appropriate, were not considered "effectively applied". A common weakness of many answers was that while candidates explained that by imposing a price floor the government increases the revenues of the producers, they did not provide any explanation of why the government would want to increase the revenues of agricultural producers, resulting in somewhat incomplete answers. Surprisingly many candidates drew a price ceiling diagram to show a minimum price.
