Question 21M.3.HL.TZ0.j
| Date | May 2021 | Marks available | [Maximum mark: 2] | Reference code | 21M.3.HL.TZ0.j |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | State | Question number | j | Adapted from | N/A |
Figure 2 illustrates Islandia’s demand (D) for and supply (S) of rice.
Figure 2
The government of Islandia wants to reduce the price of rice by 40 % in order to enable low-income households to buy enough rice to meet their needs. The government decides to achieve this by imposing a maximum price.
The government of Islandia realises that when a maximum price is set below the equilibrium price, a method of non-price rationing is necessary. Critics of the maximum price policy argue that it might result in the creation of a parallel market.
State two methods of non-price rationing.
[2]
Award [1] for each appropriate method, up to a maximum of [2].
Methods may include:
- first-come, first-served (queueing)
- allocation according to sellers’ preferences
- rationing systems using coupons/vouchers or applying a quota per customer/household e.g. distribution according to income level/size of household would be acceptable
- random allocation by ballot
- any other reasonable response.
Generally well-answered although a small but nevertheless a surprising number of candidates did not respond or did not understand the term "non-price rationing". Phrases such as "distribution by the government" were provided by lower-achieving candidates.
