DP Economics
Question 23M.1.HL.TZ2.a
| Date | May 2023 | Marks available | [Maximum mark: 10] | Reference code | 23M.1.HL.TZ2.a |
| Level | HL | Paper | 1 | Time zone | TZ2 |
| Command term | Explain | Question number | a | Adapted from | N/A |
a.
[Maximum mark: 10]
23M.1.HL.TZ2.a
Explain why products may have different income elasticities of demand.
[10]
Markscheme
Refer to Paper 1 markbands for May 2022 forward, available under the "My tests" tab > supplemental materials.
Answers may include:
- Terminology: income elasticity of demand (YED)
- Explanation: that a positive YED is where an increase in income leads to an increase in demand/a decrease in income leads to a decrease in demand and that this is associated with normal goods; that a negative YED is where an increase in income leads to a decrease in demand/a decrease in income leads to an increase in demand and that is associated with inferior goods; that some goods may have a high income elasticity of demand (ie income elastic) and some may have a low income elasticity of demand (ie income inelastic).
- Diagram: demand and supply diagram showing relevant shifts of demand, Engel curve.
A maximum of [6] should be awarded if only one aspect of the question is addressed.
Assessment Criteria
Part (a) 10 marks
Examiners report
For many candidates this was a very straight forward question which they answered to a good standard. However, a significant number of candidates confused income elasticity with price elasticity of demand and were therefore unable to make much progress with their response. Concepts such as normal and inferior goods were often not mentioned.
