Paper 3: Policy
HL only
HL only
Duration: 1 hour 45 minutes
Weighting: HL 30%
Students answer every part of both questions. No choices are given.
The two questions are each subdivided into two main parts: (a) and (b). Part (a) is subdivided into several more parts.
Students may use a calculator. A scientific calculator is sufficient. If using a graphic display calculator (GDC), do not use the graphing function to plot, for example, demand and supply graphs from algebraic functions. It does not work well because of the reversal of the dependent (Q) and independent (P) variables on the axes.
Overall advice
Specific recommendations for each part
Part (a) questions [20 marks]
See teaching point 1.
Weighting: HL 30%
Students answer every part of both questions. No choices are given.
The two questions are each subdivided into two main parts: (a) and (b). Part (a) is subdivided into several more parts.
Students may use a calculator. A scientific calculator is sufficient. If using a graphic display calculator (GDC), do not use the graphing function to plot, for example, demand and supply graphs from algebraic functions. It does not work well because of the reversal of the dependent (Q) and independent (P) variables on the axes.
Overall advice
- Look carefully at the command terms in each question. In combination with the marks allocated, they indicate the depth required. (See the list of command terms in this “Specific recommendations for each part” section.)
- During the five-minute reading time, look particularly at the part (b) questions. Then, as you work through the part (a) questions, consider how the information in them might be utilized to provide supporting evidence for the analysis and evaluation in the answer to the part (b) question.
- Suggested time allocations
- Q1 part (a): about 30 minutes in total
- Q1 part (b): about 20 minutes
- Q2 part (a): about 30 minutes in total
- Q2 part (b): about 20 minutes
- The suggested time allocations reflect the marks awarded—20 marks in total for all the subparts in part (a) and 10 marks for part (b). However, an excellent answer to the part (b) question would probably benefit from more time being allocated to it if the student can work rapidly through the part (a) questions.
Specific recommendations for each part
Part (a) questions [20 marks]
See teaching point 1.
- Unless otherwise stated in the question, all numbers must be given exactly or be correct to two decimal places.
- If the question is worth 2 marks, some working must be shown to gain the full 2 marks. For example, if asked to calculate the equilibrium price and quantity, show at least one step of the calculation. Do not only read it from the graph or estimate it.
- Write the units of the answer (eg millions of $) appropriately.
- Work quickly through part (a), so that enough time is left to answer part (b) properly.
- If a question seems too difficult to answer, move on—it is probably only worth 1 or 2 marks.
- If you realize later that you have made a mistake in an initial calculation on which subsequent calculations have been based, do not bother to go back and correct it all unless you have plenty of spare time. The “own figure rule” (OFR) applies.
- If required to write an explanation or reasons (usually in a 4-mark question), be concise and precise. However, refer explicitly to the numbers in the data or the graph or prior calculations, as appropriate. Bullet points are acceptable, if asked, for example, to give two reasons.
- If required to draw a diagram:
- use a ruler for the axes and for straight lines
- label axes as fully as appropriate (eg not just P and Q, but $P or Q (000,000 per week))
- use a pencil but ensure that the lines are firmly drawn so that they will be legible when scanned.
Paper 3 Assessment HL
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Markscheme for Paper 3 Assessment HL
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Teaching point 1
There is no formula booklet as there is for mathematics exams. Therefore, students will need to have enough practice in using formulas to ensure that the formulas are memorized. Teachers may decide to provide students with a list of the most commonly used formulas, as shown below.
*A common mistake is for students to calculate percentage changes based on the new amount rather than on the original amount.
Teaching point 2
The requirement to write a policy recommendation based on data is newly introduced for this syllabus. It is essential that students practise writing concise answers that, nevertheless, incorporate references to the information in the part (a) questions or answers, economic theory, and evaluation. The evaluation of the policy could take the form of showing a realization of when the policy might not work effectively.
The page provided in the answer booklet for answering this question may be insufficient for many students, especially if a diagram is drawn. However, additional answer sheets will be provided so that the answer can be written on these sheets. In that case, the student should write a note at the end of the first page, such as “Please see the additional pages”.
There is no formula booklet as there is for mathematics exams. Therefore, students will need to have enough practice in using formulas to ensure that the formulas are memorized. Teachers may decide to provide students with a list of the most commonly used formulas, as shown below.
- Elasticity (price elasticity of demand, elasticity of supply, income elasticity of demand)
- Revenue and profit
- Marginal and average quantities (for costs and for revenue)
- Conditions for:
- profit maximization
- allocative efficiency or socially optimum output
- gross domestic product (GDP) and gross national income (GNI) components
- Unemployment rate
- Calculation of percentage changes* (including growth) and index numbers
- A weighted price index
- Real GDP or GNI given a price deflator; GDP or GNI per capita
- Real interest rate given the inflation rate
- Multiplier
- Opportunity costs from a set of data in a table, eg identify which economy has the comparative advantage in which good
- Balance of payments components
- Exchange rates, eg calculating which has appreciated or depreciated
- Interpreting income quintile data and plotting a Lorenz curve
- Calculation of total tax and average tax rates from a set of data
- Calculation of consumer surplus, producer surplus and welfare losses from diagrams
*A common mistake is for students to calculate percentage changes based on the new amount rather than on the original amount.
Teaching point 2
The requirement to write a policy recommendation based on data is newly introduced for this syllabus. It is essential that students practise writing concise answers that, nevertheless, incorporate references to the information in the part (a) questions or answers, economic theory, and evaluation. The evaluation of the policy could take the form of showing a realization of when the policy might not work effectively.
The page provided in the answer booklet for answering this question may be insufficient for many students, especially if a diagram is drawn. However, additional answer sheets will be provided so that the answer can be written on these sheets. In that case, the student should write a note at the end of the first page, such as “Please see the additional pages”.