Question 21N.1.SL.TZ0.b
| Date | November 2021 | Marks available | [Maximum mark: 15] | Reference code | 21N.1.SL.TZ0.b |
| Level | SL | Paper | 1 | Time zone | TZ0 |
| Command term | Evaluate | Question number | b | Adapted from | N/A |
Evaluate the view that a price ceiling is an ineffective policy to protect low-income consumers.
[15]
Marks should be allocated according to the paper 1 markbands for May 2013 forward, part B.
Answers may include:
- definition of price ceiling
- diagram to show the impact of a price ceiling on the market for a necessity good
- explanation of how a price ceiling leads to excess demand/shortage for a necessity good and leads to problems like queues, parallel markets and corruption
- examples of the use of price ceilings
- synthesis or evaluation.
Evaluation may include: the benefits a price ceiling might bring to low-income consumers if the ceiling is managed through an effective alternative rationing system and how some consumers will gain significantly through a price ceiling even if others lose.
There were many good answers to this question with the strongest responses clearly explaining how a price ceiling can benefit low-income consumers in markets for goods such as housing, basic food, and energy. Many candidates evaluated the policy well by considering how maximum prices can lead to parallel markets, shortages and corruption. The best answers used effective diagrams and well-developed real-world examples.
