Economics
Economics
Economics
ECONOMICS
Paper 9708/11
AS Level Multiple Choice
1 C 11 D 21 D
2 D 12 D 22 B
3 A 13 C 23 D
4 B 14 C 24 B
5 C 15 C 25 B
6 C 16 D 26 C
7 D 17 B 27 D
8 B 18 B 28 D
9 B 19 C 29 A
10 B 20 B 30 D
General comments
Most candidates answered between 14 and 23 questions correctly. Question 2 and 13 were the only
questions answered successfully by more than three-quarters of the candidates. However, Questions 7, 12
and 26 were the only ones answered correctly by fewer than a third of the candidates. Candidates performed
significantly less well in the macroeconomic questions.
Question 7 was answered correctly by 31 per cent of the candidates. The question required candidates to
calculate the supply of each firm at two prices. Most better performing candidates were able to identify option
D as the correct answer, as this firm’s supply will be 20 at each price, so it will have a vertical supply curve.
Most low performing candidates selected option A or option B. In the case of option A, although the market
share remains constant this will mean that supply will increase from 5 to 10 units as the price increases. For
option B, supply will increase from 10 to 50 units. In both cases, this leads to a normal upward-sloping
supply curve.
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Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Question 12 shows the continued misunderstanding by candidates when identifying the nature of a good.
Just because a good is provided free of charge does not make it a ‘free good’ (a good with no opportunity
cost). Just because it is provided by the government does not make it a ‘public good’ (a non-excludable and
non-rival good). However, option A (a free good) and option B (a public good) were the most popular
answers chosen, especially by lower performing candidates. Option C was not popular, as most candidates
recognised that food was vital for survival so could not be a demerit good. This left option D as the correct
answer, although only chosen by a quarter of the candidates.
Question 16 required candidates to identify why NNI would be less than GNI. Option D was the correct
answer, as the standard difference between the two terms is net depreciation (the difference between gross
and net data). It was surprising that only 37 per cent of the candidates chose this option. Options A and B
were popular answers, chosen by 30 per cent and 22 per cent of the candidates respectively. However,
option A is incorrect as income from overseas affects the difference between national and domestic income,
not gross and net. Option B is also incorrect, as inflation is the difference between nominal and real data.
Question 26 required candidates to identify when gains from specialisation and free trade would be the
smallest. This was the least well answered question and may have been due to candidates not reading the
question carefully enough, although the word ‘smallest’ was emboldened. Specialisation requires high
mobility of factors within a country. Therefore, low factor mobility between goods would not facilitate
specialisation. This rules out options A and B, although these two options were chosen by over a third of the
candidates. Option D was the most popular. However, low mobility of factors between the two countries
would encourage trade, as each country would have little option than trading to gain the goods it cannot
produce. This leaves option C as the correct answer.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/12
AS Level Multiple Choice
1 C 11 B 21 D
2 D 12 B 22 D
3 D 13 D 23 D
4 D 14 D 24 A
5 B 15 B 25 B
6 C 16 C 26 B
7 D 17 C 27 B
8 B 18 C 28 C
9 C 19 D 29 B
10 B 20 C 30 D
General comments
Due to a series-specific issue, we have not included candidate answers for three questions in their total
mark. Instead, we have multiplied each candidate's total mark by a weighting factor so that the maximum
mark for the question paper remains unchanged.
Most candidates answered between 16 and 24 questions correctly. Question 1, 2, 10 and 13 were answered
successfully by more than 80 per cent of the candidates. However, Question 14 and 20 were the only ones
answered correctly by fewer than a third of the candidates. Candidates performed significantly less well in
the macroeconomic questions.
Question 14 was about how a government may intervene in a market to manipulate the equilibrium price.
Option D was the correct answer and chosen by a third of the candidates. The government needs to shift the
demand curve to the right to intersect at the preferred price of $10. This will require the government to
purchase 400 units of the product at a price of $10, giving the answer of $4000. Option C was equally
popular, although it is unclear why this was so. Option A was chosen by about one in five candidates. This
may have come from multiplying the difference in the price by the difference in the quantity, although this has
no basis in economic theory.
Question 20 was about macroeconomic objectives. Option B was the most popular answer, with more than
40 per cent of candidates selecting it. However, an increase in output will not necessarily mean that more
workers are employed. This increased output may come about from higher levels of productivity or increased
use of capital. Option A was less popular, although still chosen by one in five candidates. However, evidence
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Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
shows that economic growth is much more likely to lead to a less even distribution of income. Option D was
also incorrect, as stable inflation only requires the rate of inflation to be close to constant, at whatever rate.
The correct answer was option C, although only chosen by 31 per cent of the candidates. Any choice about
a government’s macroeconomic objectives is ultimately one based on that government’s preferences or
priorities, so is a value judgement or normative decision.
Question 25 asked candidates to identify the policy having the least impact on the import of textiles.
Although answered correctly by more than 40 per cent of candidates, a greater number of candidates chose
option D. Options A and C, a ban and a tariff on imports, were not popular answers as both would clearly
have a greater impact on imports than domestic output. The choice between options B and D comes down to
the policy which will have a similar impact on domestic output and imports. Option B, a sales tax on all
textiles, is the correct answer as it will have the least relative impact on imports. In contrast, option D, a
minimum quality standard, may well have a greater impact on imports, especially from countries with lower
quality standards.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/13
AS Level Multiple Choice
1 A 11 B 21 D
2 D 12 A 22 D
3 C 13 B 23 B
4 A 14 D 24 D
5 C 15 A 25 B
6 D 16 A 26 B
7 C 17 C 27 A
8 A 18 C 28 D
9 C 19 C 29 B
10 C 20 C 30 C
General comments
Overall performance was reasonable, with most of the candidates correctly answering more than 18 of the
questions. There were some very good candidates, with one in five answering at least 25 of the questions
correctly.
Questions 4, 6, 9 and 23 were answered successfully by more than 80 per cent of the candidates. Question
8 was the only question answered correctly by less than 20 per cent of the candidates. Candidates
performed similarly in the microeconomic and macroeconomic questions.
Question 8 was the only question on which candidates did not generally perform well. The firm, to utilise its
full capacity, must increase demand by 2000 units, an increase of 25% from its current level of demand. If
the price elasticity of demand is unitary, this will require a fall in price of also 25%. Therefore, the firm must
reduce the price from $12 to $9, so the answer is option A. However, option B was chosen by many
candidates. This is a fall in price of only 20%. This suggests that these candidates worked out the required
percentage change in demand incorrectly, using the capacity figure as the denominator, rather than the
current level of demand.
Question 14 was answered correctly by just over a third of the candidates. However, two other options
proved to be very popular. This suggests a lack of understanding about the basic relationship between the
shape of a supply curve and its price elasticity of supply. Any straight-line supply curve which starts at the
origin will always have a unitary elasticity of supply. The imposition of an indirect tax will shift a supply curve
to the left, so the one in the diagram will now start on the vertical axis, which is typical of a price elastic
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
supply curve. The correct answer is therefore option D. The fact that three of the four options (excluding
option A) were popular, suggests an element of random selection by many candidates.
Question 24 was about the best combination of policies required to correct a current account deficit.
Although answered correctly (option D) by nearly 40 per cent of candidates, many candidates chose option
B. To find the correct answer, a combination of policies is required which will reduce import spending and/or
increase export spending. In option B, although a currency depreciation (the key policy option) will help by
making imports more expensive and exports less expensive, the lower rates of interest and income tax will
help to increase household disposable income, partly counteracting more expensive imports. On the other
hand, the policies in option D, as well as depreciating the exchange rate will reduce household disposable
income by increasing income tax and keeping interest rates unchanged. In questions asking for the most or
least likely option, it is vital that candidates read through all the options, rather than stopping when they
arrive on one which may be possible, but not necessarily the most or least likely to work.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/21
AS Level Data Response and Essays
Key messages
• Candidates need to ensure they focus on the particular ‘command’ or ‘directive’ word that is being used
in a question, such as ‘assess’, ‘calculate’, ‘consider’, ‘explain’ or ‘identify’ something.
• It is important candidates understand that in some questions, a certain number of marks can be
awarded for ‘evaluation’. These were Questions 1(c), 1(d), 1(e) and all questions in Sections B and
C. There is often a clue in the question to guide candidates towards this, such as in Question 1(c)
which required candidates to consider the extent to which depreciation of the Sri Lankan rupee could
improve the country’s balance of trade in goods and services, or in Question 3(a) which required
candidates to explain, with the help of a formula, what is meant by the income elasticity of demand for a
product and consider the extent to which demand for the product will always rise at the same rate as the
income of its consumers, or in Question 5(b) which required candidates to assess which expansionary
macroeconomic policy would be most likely to enable a government to meet its economic objective of a
low rate of unemployment.
• Candidates need to understand that an appropriate formula should be included in answers when they
are explicitly asked for in a question, such as the formula for income elasticity of demand in
Question 3(a).
• Candidates need to ensure that diagrams are correctly drawn and clearly labelled. There were,
unfortunately, a number of examples of poor labelling and, in some cases, no labelling at all. There
were a number of questions where diagrams could have been used to good effect to support an answer,
such as Question 4(a).
• It is important that candidates read the questions very carefully to avoid making an error in their answer.
For example, in Question 1 (a), some candidates described what happened in all of the months shown
in Table 1.1 rather than identifying the overall trend in Sri Lanka’s balance of trade in goods and
services between January 2022 and January 2023, while in Question 2 (a), some candidates wrote
about demerit goods despite the fact that there was no reference to demerit goods in the question.
General comments
It was obvious in some answers that candidates had not looked closely at the ‘command’ or ‘directive’ word
being used in the question. It is important that candidates do recognise whether they are being asked to
‘assess’, ‘calculate, ‘consider’, ‘explain’ or ‘identify’ something.
It is also important that candidates focus on whether there is any additional guidance provided in a particular
question, such as in Question 2 (b), where candidates were required to assess whether a planned economic
system should always switch to a mixed economy.
Section A
Question 1
(a) (i) Many candidates were able to correctly identify the overall trend in Sri Lanka’s balance of trade in
goods and services between January 2022 and January 2023, recognising that the trade deficit
had declined, but some candidates wrote about what was happening in each of the months shown
in Table 1.1 rather than the overall trend over the whole period.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
(ii) Most candidates were able to calculate the percentage change in Sri Lanka’s balance of trade in
goods and services between January 2022 and January 2023 as 52 per cent.
(b) Many candidates were able to explain what was meant by ‘Sri Lanka has enjoyed a comparative
advantage in growing and exporting tea’, stressing that this meant that Sri Lanka could grow and
export tea at a lower opportunity cost than another country.
(c) Many candidates were able to write about the possible link between a depreciation of the Sri
Lankan rupee and an improvement in the country’s balance of trade in goods and services, in
terms of making the price of exports relatively cheaper and the price of imports relatively dearer.
Very few of them made any attempt to offer any evaluation despite the fact that the question
explicitly asked them to consider the extent to which depreciation of the rupee could improve the
country’s balance of trade.
(d) The majority of candidates were able to offer an explanation and analysis of the possible link
between the removal of protectionism and the likely effect on the balance of trade deficit, but
relatively few then went on to offer a meaningful evaluation of how likely the removal of all
protectionism would reduce the balance of trade deficit. It is important that candidates realise when
they are required to offer some evaluation; this is why a careful reading of the question is so
important.
(e) A number of candidates made quite a good attempt to assess the possible supply-side policies that
could have been taken to ‘lead Sri Lanka back into economic growth’, such as in relation to
education and training, but unfortunately, as in the previous question, many candidates did not
attempt to offer any evaluation of the different policies despite the fact that the command word
used in the question was ‘assess’.
Section B
Question 2
(a) In this part of the question, candidates were required to explain, with the use of examples, the
difference between public goods and merit goods and to consider whether markets would always
provide enough of both goods. Most candidates were able to demonstrate a good knowledge and
understanding of the characteristics of both public goods and merit goods, although some of the
examples given were incorrect. The analysis and evaluation, however, was somewhat limited in
relation to market provision.
(b) In the second part of the question, candidates were required to assess whether a planned
economic system should always switch to a mixed economy. Candidates were generally able to
analyse the potential advantages and disadvantages of the two types of economic system but did
not always offer a convincing evaluation in relation to the switch. It needs to be remembered that
although eight marks are allocated to ‘knowledge and understanding’ (AO1) and ‘analysis’ (AO2) in
the part (b) questions, four marks are allocated to ‘evaluation’ (AO3).
Question 3
(a) In this part of the question, candidates were required to explain, with the help of a formula, what is
meant by the income elasticity of demand for a product and to consider the extent to which demand
for the product will always rise at the same rate as the income of its consumers. Most candidates
were able to provide the appropriate formula, although many of them left out the percentage
change. Many candidates were able to analysis how the outcome would depend on whether the
product was a normal good or an inferior good. Unfortunately, some candidates were confused
about when there would be a positive coefficient and when there would be a negative coefficient.
Relatively few candidates made any attempt to offer a considered evaluation of the possible
outcomes; this shows the importance of candidates reading the question as carefully as possible.
(b) In the second part of the question, candidates were required to assess the extent to which price
elasticity of supply or cross elasticity of demand was more useful to a business. Most candidates
were able to provide an assessment of the usefulness of the two elasticities, but as in Question 2
(b), little evaluation was provided by the majority of candidates in terms of offering a valid
comparison of the two, despite the fact that four of the twelve marks available were for evaluation.
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Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section C
Question 4
(a) In this part of the question, candidates were required to explain three of the components of
aggregate demand and to consider the extent to which they may be increased without leading to
inflation. Most candidates were able to demonstrate a good knowledge and understanding of three
of the components, but the analysis of the link with inflation was often rather limited.
(b) In the second part of the question, candidates were required to assess the extent to which it would
be possible for the Chinese government to achieve its objective by fiscal policy alone. Most
candidates were able to offer a reasonable analysis of using fiscal policy to achieve the objective,
but there was a more limited analysis of possible alternative policies, such as monetary policies or
supply-side policies. Unfortunately, relatively few candidates made an attempt to offer any
evaluation of which policy approach was likely to be more successful in achieving the objective of
the Chinese government, despite the fact that although eight marks are allocated to ‘knowledge
and understanding’ (AO1) and ‘analysis’ (AO2) in the part (b) questions, four marks are allocated
to ‘evaluation’ (AO3).
Question 5
(a) In this part of the question, candidates were required to explain three causes of unemployment and
to consider which cause was likely to be the most damaging to a high-income country. Most
candidates demonstrated a sound knowledge and understanding of three possible causes of
unemployment, but the analysis of the link to a high-income country was, in most cases, rather
limited. Relatively few candidates were able to offer any meaningful evaluation.
(b) In the second part of the question, candidates were required to assess which expansionary
macroeconomic policy would be most likely to enable a government to meet its economic objective
of a low rate of unemployment. A number of candidates did refer to different possible
macroeconomic policies, but some of them only referred to one. This made it very difficult for such
candidates to offer any meaningful evaluation as to which policy would be most likely to achieve
the objective of a low rate of unemployment.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/22
AS Level Data Response and Essays
Key messages
• For Question 1, data response, one important change within the new syllabus is that 4– and 6-mark
questions will contain a requirement for explained analysis and evaluation. Similarly, knowledge and
understanding marks will only be awarded if they are relevant to the question and, where possible,
within the context of the data itself.
• Part (a) of essay questions is now split on a 3, 3 2 basis. AO1 gains up to 3 marks, AO2 up to 3 marks
and AO3 up to 2 marks. Candidates need to organise their answers based on this split and must be
encouraged to apply all knowledge and understanding to the question that is set. Furthermore, all
analysis should be relevant and fully explained to gain credit. Answers that simply state facts without
any explanation are very unlikely to gain credit. Finally, evaluation must compare and contrast the
preceding analysis and make a judgement to answer the question to be awarded marks.
• Whilst the use of accurate graphs, formulae and concepts is strongly encouraged and is indeed a very
important part of answering most questions, it is important to note that without further explanation and
analysis, such a focus alone will only be credited as AO1. Analysis is underpinned by such knowledge
and understanding but to move into AO2 and AO3, it requires further elaboration and
explanation/application.
• In part (b) of essay questions, answers which examine one side of the question only will be highly
unlikely to gain more than mid-Level 2 analysis and will not be awarded evaluation marks as they are
unlikely to fully answer the question.
• Candidates therefore need to be fully prepared by centres to follow this approach to maximise their
marks.
• Centres are further reminded that questions may be drawn from any part of the syllabus and therefore
full coverage (including all new areas) of the syllabus is essential.
General comments
• Overall, a full range of marks was in evidence and there was a pleasing number of high marks within the
whole cohort.
• Equally, there was a significant minority of candidates who were clearly underprepared for the
examination and achieved very low marks despite, in some circumstances, writing a great deal.
• Rubric errors were pleasingly rare, and most candidates answered the correct number of questions from
the correct sections of the paper.
• For most candidates, time did not appear to be a problem and most appeared to finish with enough
time. However, there is still a tendency to spend too much time on the 2-mark questions and also on
detailed discussions within essays of information that is not relevant to the question.
• Although most scripts were legible, there was still a significant minority where handwriting was indistinct.
Every candidate will want their hard work to be accredited but need to take more care in certain
instances, to ensure that it can be clearly read by Examiners.
Section A
Question 1
(a) The question asked candidates to compare what had happened to consumer prices between
March 2021 and February 2022. At its simplest level they had risen or increased over the period,
and we also accepted references to CPI and inflation without any direct reference to consumer
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
prices. This was satisfactory for 1 mark. Further elaboration for the second mark could be via a
correct calculation of e.g., the per cent increase i.e., 4.89 per cent , or a reference to the only
month where prices fell, i.e., July 2021. However, a simple reference to the index values and/or the
difference between them was treated as simple copying of data without a use made of it and was
not credited, Likewise, some candidates attempted to explain the changes which was irrelevant
and wasted valuable time. Also detailed descriptions of changes along the time frame were
irrelevant as the question asked for a description of the changes between the two dates. However,
most candidates earned at least 1 mark, and many earned 2 although there was often a great deal
of unnecessary writing.
(b) This question highlighted the need to produce accurate diagrams. Whereas many candidates were
able to recognise the existence of cost-push inflation for the first mark, the lack of an accurate
diagram prevented them from scoring the second mark. Again, candidates are encouraged to act
upon the directive words of the question – many candidates lost time by writing at length why cost-
push inflation was present when the question required nothing more than an identification. An
additional problem was a mis identification of the type of inflation, usually identified as demand-pull
(although there were references to creeping, hyper and supply-side inflation) and diagrams
showing a shift in the AD curve. Likewise answers that showed both demand-pull and cost-push
inflation received zero marks as the question asked for an identification of the main cause which
was cost-push and not both types.
(c) The current main cause of inflation in the Eurozone has been identified in the extract as being
supply driven/cost push. Although, in the future, the problems of a shortage of labour may lead to
shortages of output/additional demand pressure, these issues were not considered relevant to the
present problems. Whilst many candidates were able to establish the link between a shortage of
labour fueling cost-push inflation via an increase in wage rates, a surprising number did in fact
associate a shortage of labour with reduced output and instead discussed demand-pull inflation.
Moreover, although a pleasing number of candidates recognised the relevance of energy costs,
disappointingly few offered any relevant evaluation as to which was the most dominant factor. The
modal mark was 2 for a correct reference to an increase in wage costs leading to an increase in the
costs of production. Those who referenced the increase in energy costs gained a third mark,
However, as aforementioned, very few candidates attempted any judgement as to the extent to
which either cause may have contributed the most and this limited the possible overall mark to 3.
(d) This question asked candidates to assess the relative impact of rising prices on poorer families.
This meant it had to consider two perspectives and the two that were expected was firstly a
comparison with better off households and alternatively a situation where government assistance
was available. However, it appeared to be challenging for a significant number of candidates who
offered an accurate definition of PED but went on to make a series of assertions rather than explain
the comments they made. For example, it was common to see candidates assert that food and
energy were necessities and, as such, must be price inelastic in demand. Unfortunately, they often
missed the opportunity to develop this point and explain that rising prices of either food or energy
would result in a proportionately smaller reduction in quantity demanded leading to a higher
proportion of income needing to be spent on these items. Similarly, whilst candidates recognised
that rising food and energy prices would be more significant to those on poorer/fixed income
households they did not refer to the problem of these groups being unable to increase their
incomes in line with the price rises. Nonetheless, some of the best responses did address this point
and offered strong evaluative commentary by comparing the significance of rising food and energy
prices to higher income households and also the possibility for governments to consider forms of
intervention/support.
(e) A pleasing number of candidates established the link between rising interest rates and the cost of
borrowing/reward for saving before going onto provide a detailed assessment of the likely impact
on both consumption and investment as part of the transmission mechanism by which rising
inflation might be controlled. Similarly, it was not uncommon to see candidates establish the link
between rising interest rates, appreciating the currency and thereby reducing the costs of
production for those firms that imported raw materials. Many candidates were also equally
confident at providing strong disadvantages with many referring to the potential consequences for
economic growth, unemployment and government finances. However, a balanced evaluation was
uncommon and only the best answers considered both sides of the discussion and referred to both
the relevance of the time dimension in terms of rising unemployment and the general
appropriateness in using interest rates to control cost-push inflation. Consequently, 3/4 tended to
be the modal mark.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section B
Question 2
(a) Possibly because this is a relatively new addition to the syllabus, this question was attempted by
few candidates. However, marks were generally good for those who did. Most candidates were
able to provide a good definition and understood the values if 0 and 1 and gained 2 AO1 marks.
However, a clear understanding of the meaning of values between the two extremes was not
always made for the third mark. Analysis of two reasons was often attempted and applied to low-
income countries and some valid evaluation of their relative importance was made. However,
weaker candidates either ignored the significance for low-income countries or offered no evaluation
at all which depressed overall marks in some cases. Hopefully, if similar questions are asked in
future, more candidates will have the confidence to attempt it.
(b) A high proportion of strong responses were evident for this element of the question with candidates
providing a range of appropriate policies. Most candidates were able to provide good analysis of
both the strengths and weaknesses of the policies identified although this was not always clearly
related to their role in redistributing income and wealth. Consequently, these were restricted to
Level 2 However, whilst analysis of the advantages and disadvantages of each policy was often
good, evaluation of the relative success of such policies e.g., which might be best, whether they
might be successful at all in redistribution was often lacking and replaced with assertions or simple
summaries of what had been previously discussed. Clearly, this is a skill needing further
development.
Question 3
(a) The analysis in this question was not concerned with a comparison of the use of a subsidy with a
different policy or whether a subsidy was the best policy so therefore assessments of alternative
policies were irrelevant. All that was needed was an assessment, in isolation, of the effectiveness
of using a subsidy to increase the consumption of a merit good. This question was significantly the
most popular in section B. Information failure was frequently correctly identified as the reason for
under and over consumption of merit and demerit goods respectively although references to a lack
of awareness or worse/better than is realised were equally accepted. Although most candidates
were able to provide an appropriate example of each, some were imprecise and simply offered
e.g., ‘food’ or a similarly generic example as a merit good – demerit goods by contrast were often
more precise. Similarly, a pleasing number of candidates accurately explained how a subsidy
would encourage consumption via reduced costs of production resulting in reduced prices.
Moreover, strong analysis of how the success of the subsidy would depend on the extent to which
demand was price elastic or inelastic was evident, as was the fact that a subsidy was unlikely to
overcome the issue of information failure. However, some candidates were unable to gain more
than 4 marks as they explained how subsidies might work but then focused solely on alternative
methods of increasing consumption rather than explaining why subsidies would not be effective
which was the question. This meant evaluation was often irrelevant as it was not answering the
question.
(b) This question enabled candidates to demonstrate a good understanding of not only the use of
minimum prices to reduce the consumption of demerit goods, but of other potential alternatives.
Although most candidates were able to explain that a minimum price set above the free-market
level would result in a contraction in demand, many simply asserted that a surplus would emerge
as businesses would continue to produce output despite the fall in demand. Similarly, others
asserted illegal markets would simply arise without explaining why. Of the alternative policies
offered, indirect taxes were the most popular and candidates were equally as confident in
explaining not only how it might reduce the consumption of demerit goods, but also its limitations
e.g. the PED of the demerit good. Furthermore, many candidates referred to the problem of
information failure and made the point that the revenue from indirect taxation could be used to fund
the provision of e.g., advertising campaigns. As ever, the best responses attempted to answer the
question ‘why’ for all points raised even if briefly and considered both strengths and weaknesses of
the policies discussed. There was evidence of some good evaluation, and the best answers pulled
the analysis together to consider which policy discussed was likely to be the ‘best’ policy for
example, by referring to the ability of authorities to control the emergence of illegal markets, or
whether the authorities could realistically ever control the purchasing of such goods in a free
market.
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Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section C
Question 4
(a) Once again, a relatively new topic and the least popular question in section C. However, many
candidates were able to gain reasonable marks. Many had a good grasp of the basic diagram and
the correct direction of the flows of income and expenditure between firms and households
although some merely referred to the flow of factors of production and goods and services rather
than income and expenditure. Similarly, many were able to distinguish between injections and
withdrawals in an open economy and were able to explain why economic growth would occur or
not because of injections being higher or lower than withdrawals. This was also often explained in
the context of X-M due to an open economy. This often also led to valid evaluation. However, some
candidates did not draw a valid diagram showing the direction of income and expenditure flows and
attempted to explain economic growth in terms of increases in AD/AS which although correct, did
not answer the question. Overall, answers were good and as with 2(a) it is hoped that if similar
questions are asked in future, more candidates will have the confidence to attempt it.
(b) The first thing to be noted with this question is that long run economic growth is likely to need
increases in AS and AD and although better answers acknowledged this and the limitations of
supply side policy in increasing AD, many did not or made very brief reference to it. Standard
answers often focused heavily on the advantages and disadvantages of supply side policy and
then a similar discussion about fiscal and monetary policy although the latter were often discussed
as a means of increasing AS and not AD. Consequently, many answers gained reasonable marks
for analysis, they did not really address the issue of long-term growth and the need to increase
both AS and AD at a similar rate which depressed evaluation marks. However, those who did
acknowledge this and the need to combine demand and supply side policies so neither was
necessarily most effective, could and did gain high marks.
Question 5
(a) Many candidates were unable to clearly distinguish between what protectionism means and the
tools of protection. This led to some lower-than-expected AO1 marks. Candidates need to be
reminded that protectionism is not simply protecting domestic businesses and nor is it a list of the
tools of protection. It is a means of governments protecting domestic businesses from foreign
competition by interventions in the free market/free trade usually to increase the price
competitiveness of domestic businesses at home and/or overseas. The tools simply work in
different ways to achieve these objectives. As in 3(a), this question focused on one tool/policy i.e.,
tariffs, and a discussion of alternative policies was not relevant. Similarly, the policy needed to be
judged in the context of how effective it was in terms of the success in protecting domestic
businesses compared with the defined meaning of protectionism. Therefore, although there
was a great deal of accurate knowledge, despite allowances being made in the mark scheme,
marks were often disappointing as answers often did not fully address the question. Better answers
referred to the problems caused by inelastic PED for imports and the fact that trading partners may
retaliate but this was not always clearly analysed in terms of its effect on e.g., the competitiveness
of domestic businesses and so evaluation was often weak or simply e.g., quotas would be better,
and this did not answer the question.
(b) Many candidates offered standard discussions about the advantages and disadvantages of free
trade against the advantages and disadvantages of protectionism. Often this included discussions
about absolute and comparative advantage and the benefits of comparative advantage in boosting
e.g., overall output. Although much of this discussion was accurate and displayed good knowledge
and understanding, it was often poorly applied to a developing economy which was often referred
to (if at all), in passing. Whilst there were quite a number of generic answers that were not fully
applied, there were some excellent responses that highlighted the dilemma faced by developing
countries namely, the need to trade freely their (often) primary products whilst at the same time
trying to protect their infant industries and avoid exploitation of their scarce resources. Better
answers evaluated the overall question by referring to the timescale, e.g., protectionism in the short
term and a move to more free trade in the long term. The full range of marks was evident in this
question, and it emphasised the need (as in all questions) to carefully read and answer the
question set rather than a slightly different one.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/23
AS Level Data Response and Essays
Key messages
• For Question 1, data response, one important change within the new syllabus is that 4– and 6-mark
questions will contain a requirement for explained analysis and evaluation. Similarly, knowledge and
understanding marks will only be awarded if they are relevant to the question and, where possible,
within the context of the data itself.
• Part (a) of essay questions is now split on a 3, 3 2 basis. AO1 gains up to 3 marks, AO2 up to 3 marks
and AO3 up to 2 marks. Candidates need to organise their answers based on this split and must be
encouraged to apply all knowledge and understanding to the question that is set. Furthermore, all
analysis should be relevant and fully explained to gain credit. Answers that simply state facts without
any explanation are very unlikely to gain credit. Finally, evaluation must compare and contrast the
preceding analysis and make a judgement to answer the question to be awarded marks.
• Whilst the use of accurate graphs, formulae and concepts is strongly encouraged and is indeed a very
important part of answering most questions, it is important to note that without further explanation and
analysis, such a focus alone will only be credited as AO1. Analysis is underpinned by such knowledge
and understanding but to move into AO2 and AO3, it requires further elaboration and
explanation/application.
• In part (b) of essay questions, answers which examine one side of the question only will be highly
unlikely to gain more than mid-Level 2 analysis and will not be awarded evaluation marks as they are
unlikely to fully answer the question.
• Candidates therefore need to be fully prepared by centres to follow this approach to maximise their
marks.
• Centres are further reminded that questions may be drawn from any part of the syllabus and therefore
full coverage of the syllabus is essential.
General comments
• Overall, a full range of marks was in evidence and there was a pleasing number of high marks within the
whole cohort. However, across regions and centres, there was an extremely wide variation in marks
with candidates from some centres barely exceeding single figures and other centres where candidates
generally scored well,
• There was, therefore, a significant minority of candidates who were clearly underprepared for the
examination and achieved very low marks despite, in some circumstances, writing a great deal.
• Rubric errors were pleasingly rare, and most candidates answered the correct number of questions from
the correct sections of the paper.
• For most candidates, time did not appear to be a problem and most appeared to finish with enough
time. However, there is still a tendency to spend too much time on the 2-mark questions and also on
detailed discussions within essays of information that is not relevant to the question.
• Although most scripts were legible, there was still a significant minority where handwriting was indistinct
causing a great deal of concern. Every candidate will want their hard work to be accredited but need to
take more care in certain instances, to ensure that it can be clearly read by Examiners.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section A
Question 1
(a) It was very clear that very few candidates had any real understanding of what is meant by or how
to calculate real interest rates in an economy. It is the actual interest rate minus the rate of inflation
and in this case, 14 per cent – 48.7 per cent = –34.7 per cent. There were some extremely strange
answers, and a significant number of candidates offered no response so the majority gained zero
marks,
(b) (i) All candidates needed to do for the first mark was to identify a possible reason for the depreciation
of the Turkish lira. Reasons were clearly identified in the text although from any elaboration offered
it was obvious that many candidates did not understand why the reason itself led to a fall in
demand for the lira in the forex market and therefore a depreciation in its value. Better candidates
easily gained 2 marks whilst weaker candidates gained 1 mark due to an identification regardless
of what was written afterwards.
(ii) Most candidates who gained marks did so by brief reference to the impact on the price of exports
i.e., becoming more competitive and the price of imports i.e., becoming less competitive and the
resulting boost to domestic producers. The impact on raw material import prices and the resultant
increases in costs of production leading to possible reductions in price competitiveness was also
considered by better candidates. However, a fall in investment by domestic producers due to
uncertainty over the value of the lira in the forex market was very rarely considered. As the
discussion tended to be very simplistic, evaluation was very rare and tended not to consider PED
values or the reliance on imported raw materials so total marks tended to be 2 – 3.
(c) The extract offered many useful reference points but many of the answers were uncritical and
rarely offered much explanation as to why the separate outcomes suggested that the policies were
beneficial or not. For example, rising prices were often referred to as showing that the policies were
not beneficial but why and for who? Similarly, the collapse in the value of the lira was also often
cited as a disadvantage due to increasing import prices but they would not be disadvantageous to
all the economy, Also, very little reference was actually made to possible benefits such as the fall in
interest rates and the flattening of recent CPI rates which might lead to more investor and
consumer confidence. Whilst there were some good marks generated on this question for a
genuine critical analysis, many candidates resorted to copying out or paraphrasing chunks of the
extract and also tended to ignore one side of the analysis with the effect that the answer gained
only 1 – 2 marks.
(d) Candidates need to be reminded that a simple display of knowledge and understanding is
insufficient for credit in questions such as these. Answers must explain how, in this case, the policy
may reduce the rate of inflation and for balance, what may be the weakness. As the question refers
to policies, it was also necessary to discuss at least two alternatives. Most candidates chose to
explain other types of monetary policy including the manipulation of exchange rates and credit
restrictions plus fiscal and supply –side policy. Strangely, some referred to interest rate changes
having clearly not read the question fully. It was possible to gain good marks for this question but
only as aforementioned, if explanations were given as to how they would work rather than
overviews of the policies themselves e.g., stating that fiscal policy is the manipulation of
government spending and tax but no explanation as to how inflation may be reduced. Drawbacks
also had to be explained for each and the likely success of the policies judged against each other
to gain full marks,
Section B
Question 2
(a) Clearly, this is a highly topical question and one which many candidates (it was the most popular
question in the section) had a strong view on, normally from the perspective of the environment.
Unfortunately, many candidates did not approach it using an economics approach and there was a
great deal of generalised discussion that was often repetitive and of limited value. Better
candidates were able to refer specifically to the role of income, tastes and attitudes and more often,
the price and availability of complements and substitutes. Such candidates were then able to make
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
a compelling case for income and energy (including petrol and electricity) prices being most
significant at the present time and draw relevant conclusions. Sadly, such analysis was rare
despite the question being accessible to most candidates.
(b) There were quite a number of accurate and not so accurate demonstrations of knowledge and
understanding of what is meant by cross elasticity of demand and income elasticity of demand.
This was often accompanied by formulae, definitions and graphs again, some accurate and some
inaccurate. However, application to the question of which was most important in determining the
demand for electric cars was much rarer. As pointed out in the key comments, such an approach
alone is level AO1 even if described well. Level AO2 responses must be applied and relatively few
candidates were able to do this confidently. Consequently, evaluation marks were rare, and marks
overall tended to be low. Candidates need to be encouraged to limit the demonstration of
knowledge and understanding and focus more on how, in this case XED and YED could be used to
determine the demand for electric cars.
Question 3
(a) Fewer candidates attempted this question than Question 2, and those who did clearly found it
challenging. Although most who attempted the question were able to draw a valid diagram, most
were unable to demonstrate that a move to allocate more resources to consumption would be
represented by a movement along the curve towards the consumption axis. Furthermore, many
candidates were unable to offer much in the way of explanation as to how a government could
ensure more resources were allocated in this way. Those who did generally referred to subsidies,
but it was not always clear that these should be for consumers rather than businesses. Reducing
support to businesses for investment was rarely mentioned as was reducing income tax or taxes on
consumer expenditure, Similarly, any valid evaluation was rare. This was a slightly different
approach to a fairly standard question but clearly the few candidates who attempted it found it
difficult to answer.
(b) There were some reasonable answers that discussed the trade off involving short run and long run
effects mainly for consumers and governments. However, in the few answers available, most just
simply assumed producers would gain as they could make additional profits, consumers would
have more choice and governments would receive more revenue without any critical analysis which
led to Level 1/2 responses. However, for the few who critically examined the time scale e.g., the
fact that in the short run consumers might have less resources and choice available and may need
to pay higher taxes to fund investment by government, in the long run more choice may be
available, and government may gain increased tax revenue. In this group, candidates were then
able to make reasonable evaluation as to whether producers would be the only ones to benefit.
Section C
Question 4
(a) This was by far the most popular question in section C. It also had a full range of marks. The main
reason for very low marks was simply an inaccurate, often micro diagram that occasionally inverted
the S and D curves and sometimes, despite the question, had no diagram at all. For weaker
candidates, the diagram was the only source of marks for knowledge and understanding. However,
better candidates were able to offer an explanation as to why AD might rise and how this might
affect real output and the price level depending on the shape of the AS curve or whether AS shifted
along with the increase in AD e.g., if it was a result of an increase in I. Such candidates also often
made clear references to the extent of spare capacity in the economy and were able to offer valid
evaluation of the extent of the problem of inflation depending on spare capacity.
(b) This was a straightforward question, and the better candidates had a good understanding that it
depended upon the type of unemployment as to whether increases in AD or supply side policy was
the best option. Weaker candidates tended to just describe various policies without any critical
analysis or differentiation about the extent to which they could reduce e.g., structural and cyclical
unemployment. As ever, the degree of explanation of the policies and the links to how effectively all
types of unemployment could be reduced determined the level of marks awarded. The reference to
a high-income country was rarely made and even when it was, it was only generally made in
passing. Evaluation tended to be summative and assertive and added on as an afterthought. It
would assist candidates if more emphasis was placed on this skill given the number of marks now
allocated to A03.
© 2024
Cambridge International Advanced Subsidiary Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Question 5
(a) and (b) It is impossible to offer an adequate assessment of how this question was approached. Very few
candidates attempted it and only one reasonable answer was seen. Candidates in general did not
understand what is meant by terms of trade. There was great confusion as to whether it referred to
the rules of trade or the balance of trade which meant the vast majority of answers gained 0 marks
for both parts of the question. Clearly, this is a part of the syllabus that requires more attention.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/31
A Level Multiple Choice
1 B 11 B 21 D
2 C 12 A 22 C
3 A 13 D 23 D
4 B 14 B 24 A
5 C 15 C 25 B
6 C 16 C 26 B
7 B 17 B 27 C
8 A 18 D 28 A
9 C 19 A 29 C
10 B 20 A 30 A
General comments
Overall performance was of a good standard with 15 per cent of the candidates answering more than 24 of
the questions correctly.
Candidates performed slightly better on the microeconomic questions compared to the macroeconomic
ones. Questions 2, 3, 5, 9 and 28 were answered most successfully, with a correct response rate of more
than 80 per cent in each case. Questions 11 and 19 were answered correctly by fewer than a third of the
candidates.
Question 11 required candidates to identify a policy causing government failure. This is where a policy
implemented to correct a problem, in this case the amount of rubbish (garbage) created by firms, may cause
a deterioration in economic performance. Just under a third of the candidates correctly answered option B.
Taxes will often cause the creation of a shadow economy which, in this case, may lead to illegal dumping of
rubbish (fly tipping) which is one example of government failure. The other three options were each selected
by between a fifth and a quarter of candidates. However, each option (incentives, advertising, and grants) is
encouraging positive behaviour, as opposed to taxation which penalises negative behaviour. It is the latter
type of policy which is most likely to lead to government failure.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Question 13 was about the cause of the poverty trap. As more than a fifth of candidates selected each of the
three incorrect answers, it suggests that many did not know the meaning of this term. Option A may be one
definition of poverty. Option B may be unwise, but will not necessarily affect poverty, due to savings or
borrowing. Option C may lead to a fall in disposable income. However, option D is the correct answer as the
poverty trap is linked to the loss of benefits as an individual or household earns more income.
Question 19 was the least well answered, with only 28 per cent of the candidates choosing option A. This is
correct as the Keynesian model assumes households will save a greater proportion of their income as it
increases. Option C was chosen by more than 40 per cent of the candidates but, unlike classical or
monetarist economic models, full employment is not an assumption of Keynesian theory. Option D was less
popular but still selected by one in six candidates. However, the Keynesian model can be applied to open or
closed economies (i.e., with or without international trade).
Question 29 required candidates to know what was meant by the optimum population. The fact that nearly
half of the candidates chose option A suggests that most did not know what this term meant or misread the
question to be about population. A rise in the birth rate may increase the population but not the optimum
population which is that population which maximises GDP per head. More than a third of candidates correctly
chose option C. An increase in the stock of the other factors of production, such as capital, will allow the
optimum population to increase.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/32
A Level Multiple Choice
1 C 11 B 21 C
2 C 12 D 22 A
3 A 13 C 23 D
4 A 14 C 24 D
5 D 15 D 25 A
6 C 16 A 26 B
7 A 17 C 27 A
8 C 18 B 28 C
9 A 19 A 29 A
10 A 20 C 30 D
General comments
Overall performance was very good, with 15 per cent of the candidates answering more than 25 of the
questions correctly. It was also pleasing to note that more than 80 per cent of the candidates answered at
least half of the questions correctly.
Candidates performed significantly better on the microeconomic questions compared to the macroeconomic
ones. Questions 1, 7, 10, 22, 26 and 29 were answered most successfully, with a correct response rate of
more than 80 per cent in each case. Questions 18 and 21 were answered correctly by less than 30 per cent
of the candidates.
Question 18 was the least well answered, with only 27 per cent of the candidates choosing option B. This is
the correct option as the provision of unemployment benefits will not force firms to raise wages (quite the
opposite may be the case). Option A was chosen by more than half of the candidates. However, although it
may be considered unethical behaviour, the presence of unemployment benefits to support workers may
make it more likely or ‘easier’ for firms to dismiss workers, if they are too expensive to employ. It is possible
that candidates missed the word ‘not’ in the question, even though it was in bold. Option D was less popular
but still selected by one in eight candidates. However, unemployment benefits will increase government
spending (in many countries it is one of the largest components of government spending) which is likely to
force taxes to be increased.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Question 20 was about three methods of measuring the performance of an economy: a PPC, the LRAS
schedule, actual GDP against trend GDP. Although more than half of the candidates correctly chose option
C (it is clear from all three diagrams that the economy is currently below its optimum or equilibrium level, so
would be experiencing a deflationary gap) each of the incorrect options were popular. Option A cannot be
correct as, in each case, any growth in the economy will not initially cause prices to rise as there is plenty of
spare capacity. It can be seen from the middle diagram that supply-side policies would be ineffective, as the
economy is currently operating on the horizontal portion of the LRAS, so option B is incorrect. Option D is
also incorrect as the PPC shows that there are excess resources in the economy which would include
labour.
Question 21 required candidates to identify the conditions required for an economy to experience a liquidity
trap. Keynes suggested this would occur when interest rates are very low, and speculators expect bond
prices to fall in the near future. Only 29 per cent of the candidates recognised that option C was correct.
Speculators would be expecting bond prices to fall if the economy is in decline which would be most likely
when both the rate of economic growth and inflation are low. Option B was the most popular answer.
However, if the rate of inflation is high, speculators will be expecting bond prices to increase. Both options A
and D were chosen by about 15 per cent of candidates. Performance by most on this question suggests that
many are unfamiliar with what conditions are necessary for a liquidity trap to exist.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/33
A Level Multiple Choice
1 B 11 B 21 D
2 C 12 A 22 C
3 A 13 D 23 D
4 B 14 B 24 A
5 C 15 C 25 B
6 C 16 C 26 B
7 B 17 B 27 C
8 A 18 D 28 A
9 C 19 A 29 C
10 B 20 A 30 A
General comments
Overall performance was of a good standard with 15 per cent of the candidates answering more than 24 of
the questions correctly.
Candidates performed slightly better on the microeconomic questions compared to the macroeconomic
ones. Questions 2, 3, 5, 9 and 28 were answered most successfully, with a correct response rate of more
than 80 per cent in each case. Questions 11 and 19 were answered correctly by fewer than a third of the
candidates.
Question 11 required candidates to identify a policy causing government failure. This is where a policy
implemented to correct a problem, in this case the amount of rubbish (garbage) created by firms, may cause
a deterioration in economic performance. Just under a third of the candidates correctly answered option B.
Taxes will often cause the creation of a shadow economy which, in this case, may lead to illegal dumping of
rubbish (fly tipping) which is one example of government failure. The other three options were each selected
by between a fifth and a quarter of candidates. However, each option (incentives, advertising, and grants) is
encouraging positive behaviour, as opposed to taxation which penalises negative behaviour. It is the latter
type of policy which is most likely to lead to government failure.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Question 13 was about the cause of the poverty trap. As more than a fifth of candidates selected each of the
three incorrect answers, it suggests that many did not know the meaning of this term. Option A may be one
definition of poverty. Option B may be unwise, but will not necessarily affect poverty, due to savings or
borrowing. Option C may lead to a fall in disposable income. However, option D is the correct answer as the
poverty trap is linked to the loss of benefits as an individual or household earns more income.
Question 19 was the least well answered, with only 28 per cent of the candidates choosing option A. This is
correct as the Keynesian model assumes households will save a greater proportion of their income as it
increases. Option C was chosen by more than 40 per cent of the candidates but, unlike classical or
monetarist economic models, full employment is not an assumption of Keynesian theory. Option D was less
popular but still selected by one in six candidates. However, the Keynesian model can be applied to open or
closed economies (i.e., with or without international trade).
Question 29 required candidates to know what was meant by the optimum population. The fact that nearly
half of the candidates chose option A suggests that most did not know what this term meant or misread the
question to be about population. A rise in the birth rate may increase the population but not the optimum
population which is that population which maximises GDP per head. More than a third of candidates correctly
chose option C. An increase in the stock of the other factors of production, such as capital, will allow the
optimum population to increase.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/41
A level Data Response and Essays
General comments
There were some good answers to this paper with many candidates presenting well balanced and clearly
structured answers which related accurately to the question and were enhanced by relevant examples and
applications throughout. Better responses came from candidates who provided evaluative comment and
development links to the question. As in previous papers the key weakness in some answers was the failure
to direct responses precisely to the question being asked. This was evident in Question 2 where candidates
did not develop the issue of efficiency. Potential access to higher grades was often denied because
candidates failed to evaluate their responses. It was evident that some centres had prepared and practised
the higher level skill of evaluation and this often boosted the final grade awarded. Question 3 explicitly
requested the use of an indifference curve diagram. Many candidates managed to produce correctly labelled
diagrams but few addressed the invitation to assess the extent to which a rise in price would affect the
demand for a normal good and for a Giffen good. Answers with no diagram could not gain marks above
Level 2. It is possible to access Level 3 marks without the use of supporting diagrams where the use of
diagrams is not required by the question. However, candidates should be encouraged to use a diagram if it is
relevant to the question. Correctly labelled and relevant diagrams can help achieve strong analysis marks
and support evaluation. There were opportunities to use diagrams. For example: Question 2 to illustrate
productive and allocative efficiencies and the long-term equilibrium position of a firm under conditions of
perfect competition and question 4 to distinguish between actual and potential growth and show any trade off
in macro objectives.
Section A
Question 1
(a) To gain full marks candidates needed to identify three aspects: the Gini co-efficient as a measure
of income inequality or wealth distribution amongst the population, the coefficient ranges from 0–1
and what these ranges represent. A number of candidates confused the representation of 0 and 1.
(b) This question was generally well answered. Many candidates correctly applied the term 'poverty
line' or used the World Bank definition of absolute poverty.
(c) This question was not well answered with a number of candidates incorrectly stating that the table
supports the conclusion that greater inequality of incomes is linked to poor literacy ratios of females
and leads to greater poverty. There is no link in the table provided to absolute poverty and there is
no information about relative poverty. There is no apparent link to poor literacy ratios. Up to 2
marks were awarded for use of the data even where the conclusion was incorrect.
(d) Most candidates identified progressive taxation and education and training as examples. Marks
were awarded for a correct policy identification and some development of this. There needed to be
a link to attaining greater equality in the distribution of income for each policy.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section B
Question 2
This was a popular question and there were some good, balanced responses which considered the long
term equilibrium position of firms in perfect competition. These responses used a diagram to support their
response and discussed both productive and allocative efficiencies. There were some good responses to the
second part of the question about what prevents efficiency being achieved. These responses commonly
examined market failure in terms of the existence of externalities, merit goods and the need for public goods.
Some candidates discussed the need for government intervention, providing relevant examples. Much
weaker was the lack of evaluative comment. Candidates should always make evaluative comments for essay
responses. In this question evaluative comments stating that perfect competition is a theoretical construct
and that government intervention in the production of a good or service does not necessarily achieve
productive or allocative efficiency, thus creating market failure.
Question 3
There were some correctly labelled indifference diagrams. Candidates attempting this question were well
prepared and produced correctly labelled indifference diagrams which illustrated the correct direction of
change due to the substitution and income effects for both normal and Giffen goods. Fewer candidates
addressed the extent of price change and failed to access AO3 marks awarded for developed, reasoned and
supported evaluative comment. For example, comment on the extent of changes linked to the price elasticity
of demand and the slope of the indifference curve and marginal rate of substitution.
Section C
Question 4
This was a popular question. There were some good responses which commented on the meaning of
economic growth, its measurement and effect. More focused responses distinguished between actual and
potential growth and made reference to the multiplier. Examples of how economic growth is good for a
country were expected. Better responses discussed the resulting increase in consumer and business
demand thus allowing for investment, research, further production and economic growth. Candidates who
provided a balanced response addressing why economic growth may not be good for a country scored
highly. For example, demand pull inflation where there is limited spare capacity, increase imports, the quality
and quantity of factors of production, environmental degradation. These were commonly stated by
candidates who produced balanced responses to this question.
Question 5
This was not a popular question choice although there were some competent answers. Definitions of the
term national income, the standard of living and the distinction between high-income and low-income was
expected. Better responses provided reasons for the difficulties of comparison of different countries due to
culture, climate, the level of subsistence and the informal economy. Other examples referred to GDP per
capita, inflation and employment trends. Evaluative comments assessing the link between using national
income figures and the standard of living gained marks. A number of candidates considered alternative
measures of the standard of living the most common being the Human Development index (HDI) and
Measurable Economic Welfare (MEW).
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/42
A Level Data Response and Essays
Key messages
• Candidates generally demonstrated that they understood the relevant theory and the best candidates
were able to articulate the analytical aspects within the context of the question. Others failed to fully
develop the analytical aspects of the question or to apply it to the context of the question.
• Many questions contained the trigger word ‘Evaluate’. This term required a candidate to judge or
calculate the quality, importance, amount, or value of the information or theory that was used in the
answer. Whilst many produced a limited evaluation few developed the evaluative point sufficiently to
gain a Level 2 evaluation (E2).
• Candidates are reminded that a thorough reading of the question is necessary to pick out the full
breadth of the question. This is especially true now the questions are without sub-divisions.
General comments
• The level of English shown by candidates was of its usual high standard. Many answers were again of a
high standard in response to the questions.
• The common faults were as in previous examinations, but they are worth repetition: The use of badly
drawn, or inaccurately labelled diagram, or even perfectly presented diagram without any reference to
them in the essay re-occurred as did the use of pre-learned answers that did not match the question
which had been set. These comments, however, should not detract from the impression that the
standard of response was high.
• Some candidates wrote at great length. In many examples these responses were poorly directed
towards the question set. Candidates who can produce a relevant, concise and well directed answer will
always be fully rewarded.
Section A
Question 1
(a) Many scored full marks on this question. The main errors were omitting to refer to ‘long term’ or
‘average costs’ in the definition of internal economies of scale.
(b) Very few had a clear idea on the concept of ‘minimum efficient scale’. Candidates were however
able to apply the concept to the data and were able to distinguish between technologies A and B.
(c) Generally, the diagram was drawn accurately, and most candidates scored 3 marks for this.
Comments based on the diagram and on the text were weaker. Some identified the fall in wages or
the structural unemployment, but few recognised the need for training. One error which occurred
on some scripts was to a reference to aggregate supply (AS) and aggregate demand (AD) when
labelling the diagram.
(d) This question saw many good answers as candidates drew relevant points from the text. However,
few made any evaluation of their answer. A minority failed to distinguish between the two countries
and regarded them as being affected in the same way.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section B
Question 2
Good candidates presented a definition of allocative efficiency (AE) either in terms of a diagram or with
reference to MC = MR or a relevant variant. Explanations of the loss of AE due to externalities was added to
the responses. Better answers explained the meaning of externalities in terms of the shift from private to
social costs and benefits. When candidates approached the requirement to illustrate their response with two
government policies they divided into two groups: those who followed this requirement and those who wrote
all the knew about possible policies. Whilst all of candidates’ answers are read and marked those who fell
into the former category generally were able to answer in greater depth and relevance.
Many candidates scored some marks for evaluation. Those who comment for example that the policy effect
depended on the price elasticity were placed in E1, those who explained how the price elasticity affected the
policy outcome were placed in E2. Explanation of the evaluation is required for E2 marks.
Question 3
Most candidates opened with a definition of the meaning of excess profits and the necessary conditions for a
perfectly competitive market structure. They then applied the definition to the market structure and drew an
appropriate diagram to show the excess profit. Diagrams were of a variable standard. Some were correct
with the marginal cost (MC) passing through minimum average cost and profit maximisation occurring where
marginal revenue (MR) equaled marginal cost (MC). A good number of candidates were unable to show
either or both of these situations. These are significant detractions from the quality of the answer.
The better responses argued that the conditions of perfect competition allowed new firms to enter the
industry lower the market price and erode the excess profits. Some did not do this and showed only the initial
equilibrium.
Those candidates who were able to produce a correct analysis for perfect competition were generally
capable of a similar degree of analysis for monopoly. They extended the analysis to show that monopoly
could retain such a profit level.
Evaluation of the answers was in most cases limited often to the expression that perfect competition was
unable to maintain excess profits whilst monopoly did. The consideration of a wider view of monopoly which
looked at whether a monopolist always gained excess profits was disregarded.
Section C
Question 4
There was generally a reasonable level of analysis of the basic effects of fiscal policy and monetary policy.
Good responses applied the theory to the context of the question, which was one of cost-push inflation.
Those who failed to recognise context limited the quality of their response. Many drew relevant diagrams
using aggregate demand (AD) and aggregate supply (AS) diagrams. Some referred to the Phillips Curve but
were unable to apply this concept to the question.
Good evaluation recognised that if the suggested fiscal policy may not be applicable to cost-push inflation
but rather to demand-pull inflation. Likewise, the suggested monetary policy may also not be applicable. An
evaluation of the analysis supply-side policies or whether the suggested fiscal and monetary policies had a
supply-side effect were appropriate.
Question 5
This question produced many good answers. Candidates had strong understanding of the concept of
globalisation and began their answers with a clear statement of this. They developed a series of analyses of
the effects of globalisation for example, Foreign Direct Investment (FDI) on investment, employment, gross
domestic product and the consequences for income and the standard of living of low-income countries. The
better answers analysed the impact in terms of both actual and potential growth. The weaker candidates did
not extend their answers to consider the income level or the standard of living.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Good evaluation was only provided by a small number of candidates, although many candidates did know a
large number of basic evaluative comments for example resource exploitation. Many of the points were not
developed through a recognition of the negative externality.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
ECONOMICS
Paper 9708/43
A level Data Response and Essays
General comments
There were some good answers to this paper with many candidates presenting well balanced and clearly
structured answers which related accurately to the question and were enhanced by relevant examples and
applications throughout. Better responses came from candidates who provided evaluative comment and
development links to the question. As in previous papers the key weakness in some answers was the failure
to direct responses precisely to the question being asked. This was evident in Question 2 where candidates
did not develop the issue of efficiency. Potential access to higher grades was often denied because
candidates failed to evaluate their responses. It was evident that some centres had prepared and practised
the higher level skill of evaluation and this often boosted the final grade awarded. Question 3 explicitly
requested the use of an indifference curve diagram. Many candidates managed to produce correctly labelled
diagrams but few addressed the invitation to assess the extent to which a rise in price would affect the
demand for a normal good and for a Giffen good. Answers with no diagram could not gain marks above
Level 2. It is possible to access Level 3 marks without the use of supporting diagrams where the use of
diagrams is not required by the question. However, candidates should be encouraged to use a diagram if it is
relevant to the question. Correctly labelled and relevant diagrams can help achieve strong analysis marks
and support evaluation. There were opportunities to use diagrams. For example: Question 2 to illustrate
productive and allocative efficiencies and the long-term equilibrium position of a firm under conditions of
perfect competition and question 4 to distinguish between actual and potential growth and show any trade off
in macro objectives.
Section A
Question 1
(a) To gain full marks candidates needed to identify three aspects: the Gini co-efficient as a measure
of income inequality or wealth distribution amongst the population, the coefficient ranges from 0–1
and what these ranges represent. A number of candidates confused the representation of 0 and 1.
(b) This question was generally well answered. Many candidates correctly applied the term 'poverty
line' or used the World Bank definition of absolute poverty.
(c) This question was not well answered with a number of candidates incorrectly stating that the table
supports the conclusion that greater inequality of incomes is linked to poor literacy ratios of females
and leads to greater poverty. There is no link in the table provided to absolute poverty and there is
no information about relative poverty. There is no apparent link to poor literacy ratios. Up to 2
marks were awarded for use of the data even where the conclusion was incorrect.
(d) Most candidates identified progressive taxation and education and training as examples. Marks
were awarded for a correct policy identification and some development of this. There needed to be
a link to attaining greater equality in the distribution of income for each policy.
© 2024
Cambridge International Advanced Level
9708 Economics June 2024
Principal Examiner Report for Teachers
Section B
Question 2
This was a popular question and there were some good, balanced responses which considered the long
term equilibrium position of firms in perfect competition. These responses used a diagram to support their
response and discussed both productive and allocative efficiencies. There were some good responses to the
second part of the question about what prevents efficiency being achieved. These responses commonly
examined market failure in terms of the existence of externalities, merit goods and the need for public goods.
Some candidates discussed the need for government intervention, providing relevant examples. Much
weaker was the lack of evaluative comment. Candidates should always make evaluative comments for essay
responses. In this question evaluative comments stating that perfect competition is a theoretical construct
and that government intervention in the production of a good or service does not necessarily achieve
productive or allocative efficiency, thus creating market failure.
Question 3
There were some correctly labelled indifference diagrams. Candidates attempting this question were well
prepared and produced correctly labelled indifference diagrams which illustrated the correct direction of
change due to the substitution and income effects for both normal and Giffen goods. Fewer candidates
addressed the extent of price change and failed to access AO3 marks awarded for developed, reasoned and
supported evaluative comment. For example, comment on the extent of changes linked to the price elasticity
of demand and the slope of the indifference curve and marginal rate of substitution.
Section C
Question 4
This was a popular question. There were some good responses which commented on the meaning of
economic growth, its measurement and effect. More focused responses distinguished between actual and
potential growth and made reference to the multiplier. Examples of how economic growth is good for a
country were expected. Better responses discussed the resulting increase in consumer and business
demand thus allowing for investment, research, further production and economic growth. Candidates who
provided a balanced response addressing why economic growth may not be good for a country scored
highly. For example, demand pull inflation where there is limited spare capacity, increase imports, the quality
and quantity of factors of production, environmental degradation. These were commonly stated by
candidates who produced balanced responses to this question.
Question 5
This was not a popular question choice although there were some competent answers. Definitions of the
term national income, the standard of living and the distinction between high-income and low-income was
expected. Better responses provided reasons for the difficulties of comparison of different countries due to
culture, climate, the level of subsistence and the informal economy. Other examples referred to GDP per
capita, inflation and employment trends. Evaluative comments assessing the link between using national
income figures and the standard of living gained marks. A number of candidates considered alternative
measures of the standard of living the most common being the Human Development index (HDI) and
Measurable Economic Welfare (MEW).
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