QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu

XYZ JUNIOR COLLEGE

2017 PRELIMINARY EXAMINATIONS
H2 ECONOMICS PAPER NO. 9757/01

READ THESE INSTRUCTIONS FIRST

Write your name and class on all the work you hand in.
Write in dark blue or black pen.
You may use a soft pencil for diagrams.
Do not use staples, paper clips, glue or correction fluid on the work that you hand in.
Answer all questions.
The number of marks is given in [ ] at the end of each question or part question.
At the end of the examination, fasten your work securely using the string provided.

This document consists of 5 printed pages

Answer all questions

QCO541 CSQ Assignment
Done by: Zhu Hanfei and Low Mei Xiu
Question 1
Extract 1: Cocoa
Abengourou, in the east of West Africas Ivory Coast, is the worlds biggest cocoa producer.
Farmers have been growing cocoa for generations there but, in a week of fresh warnings of a
global shortage by 2020, they say that their livelihood is far from easy. They know the
hardships; the risk of diseases, inconsistent rains and buyers forcing them to sell at rock-bottom
prices. With the arduous process of harvesting, farmers have been giving up on their
plantations.
Adou Leon, 34, switched to rubber seven years ago. I know the difficulties that my parents
faced with cocoa. This really did not encourage me to start planting cocoa, he says, adding that
all the young people are turning to rubber. He believes cocoa could even disappear from this
area one day.
Demand for cocoa products, especially chocolate, is surging. The Asia-Pacific region now
accounts for 16% of global guzzling. Sales in China grew by 58% from 2009 to 2013 alone,
though they were still worth just 1.6 billion ($2.4 billion) in 2013 compared with 11 billion in
America. Consumption in the West has continued to boom, too, with new posh choc brands
and chefs who grate the stuff into their chili.
Source: The Guardian, 21 November 2014 & The Economist, 10 January 2015

Extract 2: Sweet victory for chocolate makers in price fixing class action
The U.S. Court of Appeals in Philadelphia has ruled that chocolate makers did not conspire to
fix prices in the United States between 2002 and 2007. Grocery store chains, retailers, and
other companies that purchased chocolate directly from the chocolate makers failed to prove
the case. They presented evidence of three parallel price increases by the chocolate companies
over a five-year period. Parallel price increases refer to the companies raising prices at around
the same time. However the court ruled that while the firms had a motive to fix prices, evidence
of motive without more did not support the case for price fixing.
Source: Antitrust Law Daily, September 15, 2015

Extract 3: The future of chocolate: why cocoa production is at risk

Even as cocoa prices rise, farmers have not been capturing their fair share. Growers in West
Africa are likely to receive just 3.5% to 6.4% of the final value of a chocolate bar, depending on
the percentage of cocoa content.
Low prices paid to farmers result in low productivity and poverty in farming communities.
Farmers use outdated farming methods and lack resources to invest in fertilisers or in replacing
ageing trees past their peak productivity. Their communities have poor education and
2

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu

healthcare services and lack electricity and decent sanitation, with water only available from
communal wells. As prices of food and other costs rise, the failure to capture sufficient value
from their crop means that many cocoa farmers are abandoning the industry.
Many chocolate companies are waking up to the situation, and to the fact that Fairtrade can be
part of a solution, helping to ensure decent incomes for farmers and a long-term supply of
quality product to companies. More importantly, an increasing number of people make their
consumption decisions on the basis of ethical values, such as environmentally friendly products
and production methods, labour standards (wage rates and working conditions), and human
rights. Ethical consumerism is a growing phenomenon that underpins Fairtrade.
Fairtrade sales are generating significant amounts of Fairtrade Premium funds for cocoa farmer
organisations to invest in their farms, businesses, and communities. In 2011, Fairtrade cocoa
producer organisations received more than 7.6m in Fairtrade Premium money. This money is
increasingly being used to support producer organisations and farmers in strengthening their
business for example by investing in replacing old cocoa trees to increase productivity, or
investments in better facilities for crop collection, storage, transport, or processing. More than
half of Fairtrade Premium expenditure is being invested in business or organisational
development, or to support improvements in production and processing.
Source: The Guardian, 28 March 2013

Extract 4: Economic Partnership Agreement with West Africa

After ten years of talks, West Africa and the European Union (EU) concluded in February 2014
the negotiations for an Economic Partnership Agreement (EPA). West Africa accounts for more
than 38% of total trade between the EU and all African, Caribbean and Pacific (ACP) regions.
The EU supplies a large part of the equipment that contributes to economic growth and
development in the region and is the main export market for West African agricultural and
fisheries products. European annual exports to West Africa are worth approximately 31 billion.
West African exports to the EU account for 37 billion.
The deal weighs in West Africa's favour and takes account of the current differences in the level
of development between the two regions. While the EU opens its market completely from day
one, West Africa will remove import tariffs only partially over a 20-year transition period. The EU
offers market access that is significantly better than its Generalised Scheme of Preferences
(GSP). This is particularly important for some of the main non-oil exports of West Africa such as
bananas and other fruits and vegetables, fish and fishery products, processed cocoa or other
processed foods, as well as textiles or leather products.
Source: European Commission, 18 September 2015

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Figure 1: Cocoa beans Prices (Worldwide)
January 2005 to January 2016

Source: Trading Economics

Figure 2: Market Share of the Leading Chocolate

Companies in the United States (2015)

Source: Statista
4

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Questions
(a) (i) Using Figure 1, describe the change in cocoa prices from 2013 to 2014.

[1]

(ii) From Extract 1, identify and explain one demand and one supply factor that could be
responsible for this change in cocoa prices.
[4]
(b) Explain what is meant by price fixing and why firms like those in the US chocolate
industry may have a motive to fix prices.
[5]
(c) Explain one possible reason why the parallel price increases in the US chocolate
industry might not support the case for price fixing.
[2]
(d) Discuss the factors that are likely to influence whether chocolate companies will switch
to Fairtrade cocoa.
[8]
(e) Discuss the extent to which the Economic Partnership Agreement couod improve the
standard of living of cocoa farmers in West Africa.
[10]

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
XYZ Junior College
2017 Preliminary Examinations
H2 Economics Paper 1 Question 1 Answers

a (i). Using Figure 1, describe the change in cocoa prices from 2013 to 2014. [1]
[1m for correct description of overall change]:
Cocoa prices increased overall from 2013 to 2014.
a (ii). From Extract 1, identify and explain one demand and one supply factor that could
be responsible for this change in cocoa prices. [4]
Supply factor
[2m for evidence from extract AND correct explanation of factor]:
Hardships, risk of diseases, inconsistent rains and the arduous process of harvesting have
encouraged cocoa farmers to switch to farming rubber instead.
Rubber is in competitive supply with cocoa. As more cocoa farmers switch to planting rubber,
this leads to a fall in supply of cocoa and an increase in cocoa prices ceteris paribus.
Demand factor
[2m for evidence from extract AND correct explanation of factor]:
Demand for cocoa products, especially chocolate, is surging and chocolate sales in china
have grown from 58% from 2009 to 2013.
Increase in demand and sales of chocolate in 2013 leads to an increase in derived demand for
cocoa. (OR explain that cocoa is a factor of production for chocolate) Ceteris paribus, this leads
to an increase in cocoa prices from 2013 to 2014.
Comment: Take note that students must display understanding of the bolded & underlined
concepts. No partial credit awarded if student finds evidence without explanation or offers
explanation without reference to extract.
(b) Explain what is meant by the term price fixing and why firms like those in the US
chocolate industry may have a motive to fix prices. [5]
[1m for providing correct definition for price fixing]:
Price fixing is a practice whereby rival companies come to an illicit agreement not to sell
goods or services below a certain price.
OR Price fixing is where firms collude to raise prices.
OR Price fixing is where firms collude to keep price above a certain price.
Comment: Take note that the underlined/bolded segments must be present for 1m to be
awarded.
[2m for identifying AND justifying that US chocolate industry is an oligopoly]:
6

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
The US chocolate industry is operating in an oligopoly market as evidenced by the fact that
from figure 2 we see that 4-firm concentration ratio is 88.4%.
OR from Figure 2 we can see that the US chocolate industry is an oligopoly because it is
dominated by a few large firms namely Hershey, Mars, Lindt, and Nestle that together
hold over 80% of the market share.
Comment: No partial credit for identification without justification.
[2m for FULL correct explanation of why oligopoly firms may want to fix prices]:
In an oligopoly, firms are highly interdependent. (i.e. actions by one firm affects another firm
directly.) Under such conditions, price competition or price war between firms can
significantly lower profits. Thus, firms are incentivised to collude and fix prices in order to
maximise profits.
OR In an oligopoly like the US chocolate industry, as seen in Figure 2, a few large firms
together control a large proportion of total market share. By colluding and fixing prices, they
can function like a monopoly and extract higher profits by restricting total quantity produced
among themselves.
Comment: No partial credit for incomplete explanations without clear economic reasoning
displayed. Reference to profit maximising motive must be made.
Special note: Award partial credit for an answer that merely explains/describes price stickiness
and interdependence between firms (possibly using the kinked demand curve) without explicit
reference to how it links to the profit-maximising motive for price fixing.

(c) Explain one possible reason why the parallel price increases in the US chocolate
industry between 2002 and 2007 might not support the case for price fixing. [2]
[1m for evidence from extract]:
From figure 1, we can see that cocoa prices faced periods of increases between 2004 and
2007.
[1m for correct explanation of factor]:
Since cocoa is a factor of production for chocolate, firms may have faced increasing costs at the
same time. This costs may have been passed onto consumers in the form of higher prices.
Thus, the chocolate firms increasing prices at the same time might not support the case for
price fixing.
Comment: Award partial credit 1m for any correct explanation of demand or cost factor not from
the case study.

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
(d) Discuss the factors that are likely to influence whether chocolate companies will
switch to Fairtrade cocoa. [8]
Sample Answer
In traditional analysis of the pricing and output decisions of firms, it is assumed that firms are
profit maximising in the short run. In that case, chocolate companies may not want to switch to
Fairtrade cocoa as it will involve paying the farmers more. This translates into a higher marginal
cost (and total costs) incurred by these firms. Since Profits = Total Revenue - Total Cost, and
assuming that total revenue remains constant, a rise in total costs will lead to a fall in total
profits. Therefore, a possible rise in total costs is a factor that could discourage firms from
switching to Fairtrade cocoa.
However, in reality, total revenue may not stay constant. After all, there is an increasing
preference by consumers towards ethical consumption. As seen in extract 3, there has been an
increasing number of people making their consumption decisions on the basis of ethical values.
This implies that when companies switch to Fairtrade, they can advertise to consumers that
their products are ethical in terms of labour standards with decent wage rates and working
conditions for the farmers. Since consumers prefer ethical consumption, the demand for
chocolates from these companies could increase and become more price inelastic. This allows
the firm to charge higher prices and sell higher quantities, both of which lead to an increase in
the firms total revenue. If this increase is projected to outweigh the initial rise in costs, then it is
likely that firms will want to adopt Fairtrade cocoa.
Moreover, if we consider the long run implications of switching to Fairtrade cocoa, total costs
might even fall for the chocolate companies in the long run. As firms switch to Fairtrade cocoa,
farmers will begin to receive a larger portion of the final value of a chocolate bar. As seen in the
extract, Fairtrade sales are generating Fairtrade premium funds more than 7.6m used
to support farmers in strenghtening their business. With farmers receiving a higher income
from cocoa, it means that they are able to invest to replace old cocoa trees or in better facilitties
for crop collection, storage, transport, or processing, all of which help to increase productivity.
This will help to lower the average cost of cocoa production as farmers are now able to grow
more crops which are also of higher quality. Some of this cost savings might be passed on to
chocolate companies in the form of lower prices of cocoa. As a result, in the long run, it could
benefit chocolate companies via a lower long-run average cost curve. This possibility might
increase the likelihood of firms switching to Fairtrade cocoa.
Some chocolate companies may also have alternative objectives such as to become a social
enterprise. Rather than maximizing profits, the primary aim of a social enterprise is to generate
profits to further their social goal and business is viewed as the vehicle for social change. With
Fairtrade, farmers are now ensured a decent income allowing them to afford better education
and healthcare services, electricity and sanitation. As a result, the objectives of the chocolate
companies to solve the social problems and prevent exploitation of farmers will be an influence
in them wanting to switch to Fairtrade.

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Ultimately whether a chocolate company will switch to Fairtrade cocoa may strongly depend on
whether its competitors do so. This is unsurprising because firms are operating in an oligopoly.
If all firms adopt Fairtrade cocoa at the same time, the rise in costs can be easily passed on to
consumers in the form of higher prices. But if the majority refuses to adopt, then the price
stickiness in an oligopoly is likely to prevent the minority from raising prices. Therefore, whether
or not firms adopt Fairtrade in general may depend on the actions of the industrys largest firm.
Level Description

Marks

L1

For an answer that

1-3
Merely lists the factors without a theoretical Profit = Revenue - Cost
framework.
OR misinterprets the question and lists benefits to cocoa farmers without
reference to chocolate companies point of view.
Makes minimal reference to extracts.

L2

For an answer that

4-6
Uses a proper economic framework Profit = Revenue - Cost to analyse
the factors.
Makes appropriate reference to extract.
No conceptual errors.
Answers the question by considering the situation from the chocolate
companies point of view.
Considers at least one revenue factor and one cost factor.
Award higher tier marks to students who presents three or more perspectives to
form a well-considered argument.

E1

Generic evaluative comment.

E2

Evaluative comments that attempt to weigh the different factors with a suitable 2
criteria i.e. perhaps by considering the distinction between SR and LR impact on
chocolate companies OR by discussing how the oligopoly context affects firms
decisions.

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
(e) Discuss the extent to which the Economic Partnership Agreement could improve the
standard of living of cocoa farmers in West Africa. [10]
Sample Answer
Standard of living (SOL) is a multi-dimentionsal concept that has both material and non-material
aspects. SOL is not entirely quantifiable because non-material SOL covers intangibles such as
stress level, life expectancy, and quality of environment.
Thesis 1: Yes, it could improve farmers material standard of living
From Extract 4, we can see that the EU removes tariffs by open(ing) its market completely from
day one. As seen in the diagram below, world price for processed cocoa will fall from P to P1
as the tariff is removed. World price here represents the price that West Africa charges for its
processed cocoa. For now, we make the assumption that supply of processed cocoa from West
Africa is perfectly price elastic.

The fall in price leads to an increase in quantity demanded for processed cocoa. Since
processed cocoa is made from cocoa, cocoa is in derived demand and the demand for cocoa
increases. This will lead to an increase in the equilibrium quantity, ceteris paribus. Therefore,
there is an increase in revenue for cocoa farmers in West Africa, and ceteris paribus, an
increase in profits. With a higher level of income, farmers can increase their consumption. This
will increase their material standard of living.
Special Note: If students treat processed cocoa as cocoa, accept the answer. For example,
Lower tariffs -> Lower prices in the European markets -> Increase quantity demanded of cocoa> Assuming that price that farmers receive for cocoa unchanged, it will lead to an increase in

10

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
revenue (price quantity) for cocoa farmers in West Africa -> Increase in income -> Can afford
more goods and services -> Higher material standard of living.
Given the deal affects more than just cocoa, and is rather one-sided in that West Africa does not
have to reduce tariffs in the short run, it will likely lead to improvements in West Africas exports
revenue without a corresponding increase of import expenditure. This will lead to an
improvement in the current account and increases in AD. Ceteris paribus, and through the
multiplier effect, it will lead to a larger increase in NY and a rise in consumption. We will expect
a higher material standard of living in general.
These increases in material SOL mentioned above are likely to be extremely significant
because the previous standard of living for farmers were extremely low as based on Extract 3:
Their communities have poor education and healthcare services and lack electricity and decent
sanitation, with water only available from communal wells. Furthermore, with higher NY in the
country, the West African government will earn more tax revenue and gain more ability to invest
in infrastructure, education and healthcare services in the country. This can spark a virtuous
cycle that lead to further improvements in production and material standard of living.
Thesis 2: Yes it could improve farmers non-material standard of living
Such projected improvements in healthcare and education are likely to benefit the non-material
aspects of SOL as well. As farmers experience the benefits of better sanitation and healthcare,
they will live with greater comfort and enjoy higher life expectancies; as they get access to
better education, they will become more literate and can possibly transit to more skilled labour.
Moreover, with the higher income they have, they can use it to invest and replace outdated
farming methods they are currently using (based on extract 3). The use of technology can
significantly reduce the difficulty of work as mentioned in extract 1, and possibly lead to a higher
quality of life for the farmers.
Anti-thesis 1: But it may not improve farmers material SOL significantly
However, the Economic Partnership agreement might not lead to an increase in farmers
standard of living.
Firstly, the demand for both cocoa and processed cocoa are likely to be price inelastic in the
short run. Chocolate oligopolies at the retail end of the market typically enjoy huge profits and
the presence of contractual agreements means that firms are not responsive to price changes in
the short-term. These imply that any movements in cocoa prices are unlikely to impact their
production plans. As such, when the tariff is removed, quantity demanded of processed cocoa
and demand for cocoa may not increase significantly. Therefore revenue and income increases
for farmers are limited and the positive impact on SOL is reduced.

11

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Moreover, cocoa is an agricultural product and hence the assumption of perfectly price elastic
supply such that farmers can easily increase supply might not hold true. As a result, farmers
might not be able to respond to the increase in demand by producing more. Revenues may rise
by only a little. This will imply that increases in income and consequently SOL are limited.
Anti-thesis 2: It may lead to fall farmers in non-material standard of living in some
aspects.
To produce larger quantities of cocoa, farmers may have to work longer hours. This could mean
even less leisure time on top of the harsh working conditions mentioned in Extract 1. Taken on
its own, this will lead to a deterioration in non-material SOL.
Synthesis/Evaluation
We have made the ceteris paribus assumption at various points of the argument. But in reality,
this is unlikely to hold. From weather and other factors mentioned in Extract 1, it seems that
producing cocoa is plagued with uncertainty and harsh conditions. This may lead to higher costs
of production over time (as opportunity cost relative to producing rubber increases) and
outweigh any gains in revenue from the removal of tariff. Thus the agreement may not increase
farmers material standard of living.
However, the extracts also suggest that demand may continue to increase as chocolate is a
normal/luxury good. With an increase in global income, global demand for chocolate will
increase. Also, as firms enter more untapped markets such as China, demand for chocolate and
consequently derived demand for cocoa is likely to grow. The result of this will be revenue
growth and increase in profits for farmers. Overall, I would expect these factors to balance each
other out.
The most important consideration to conclude if the Economic Partnership Agreement will
benefit the farmers would be to analyse if farmers start getting adequate compensation for the
sale of cocoa. In Extract 3, it was mentioned that farmers receive very little share of the final
value of chocolate bar. This is substantiated by the fact that the chocolate companies are
oligopolies and that in Extract 1 we see that buyers forcing them to sell at rock-bottom prices.
The result of all these may mean that any increases in demand for chocolate or increase in
quantity demanded for processed cocoa may not end up benefiting West Africas farmers.
Hence it seems like the extent of increase of farmers SOL may strongly depend on whether
chocolate companies adopt Fairtrade cocoa.
Overall, I would expect both material and non-material SOL to rise, both in the short run and
long run. Short run increases would be limited by elasticity factors mentioned earlier. Long run
increases are likely to be very significant given the possible infrastructure, healthcare, and
education improvements higher income may bring to West African cocoa farmers. However,
these are contingent on external demand and supply factors cancelling each other out. Finally, if
chocolate firms were to adopt Fairtrade cocoa, it would significantly improve the pass-through
effects of the new trade agreement.
12

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Level Description

Marks

L1

1-4

L2

For an answer that

Considers only 1 perspective OR other perspectives
underdeveloped.
Makes none/minimal references to extracts.
Does not answer to the context of cocoa farmers or West Africa.

are

For an answer that

Considers multiple perspectives.
Discusses both material and non-material standard of living.
Makes appropriate references to extracts.
Refers closely to the context of cocoa farmers and West Africa.
Minimal/no conceptual errors and gaps in economic reasoning.

5-7

Award higher tier marks to students that consider three perspectives in detail
and display strong economic reasoning at every part of the essay. Arguments
are cogent and perhaps complemented with diagrams.
E1

Generic evaluative comment.

E2

Clear overall stand by weighing the different arguments using an appropriate 2

framework i.e. elasticity, SR v.s. LR, material v.s. non-material SOL. But lacks
application to specific context.

E3

Considers the implicit assumptions highly relevant to the context such as price 3
elasticity of demand and supply of cocoa, whether the ceteris paribus condition
holds, and whether firms pass on more chocolate profits to cocoa farmers via
Fairtrade. Weighs different perspective using an appropriate framework and
arrive at a sound overall judgment.

13

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Skills Analysis
AO1
a(i)

AO2

AO3

AO4

a(ii)

Mark
1

10

There are 18 marks under AO3 + AO4 and 12 marks under AO1 + AO2. Also there are 12
marks worth of questions that test up to AO3 and 18 marks that test up to AO4. These features
fit the recommended mark distribution of the A Level paper exactly. This was a deliberate
attempt on our part to ensure that all levels of skills are adequately tested.

14

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
Topic Analysis
Year

scarcity;
decision
making

12

13

(d)

14

dd/ss

elasticity

price
theory/impact

a(i)
a(ii)
(e)

(b)
(d)

(c)

(c)

a(i)

(b)
(f)

a(ii)
(d)

15

(f)

(b)
(d)
(e)

**

(d)
(b)

(a)
(e)

(b)
(d)

(e)

(d) (e)

production/costs

PC

monopoly

oligopoly

MC

public
good

neg.
ext

pos.
ext

imp.
info
/others

macro

(f)

(e)

(c)

(e)

(d)

(f)

(c)
(f)

(b)
(d)
(e)

(d) (c)

(b)
(d)

(e)

Possible weaknesses
Difficulty of case study
The case study definitely tends towards the difficult spectrum. The requirements for the
questions are definitely on the high side. Also, students may not expect market failure to be
avoided in a Micro case study and may be ill-prepared for a macro question to appear in the last
part. However, we felt that it was appropriate and necessary to set it as such because of
reasons mentioned later in the detailed rationale segment.
Extract 3 tending towards the long side
We tested the case study with some students and they feedback that Extract 3 is rather long.
We made slight edits to the original text to reduce the length but it still seems a little
overwhelming. However we decided to keep it as it is to maintain the quality of the extract. Also,
we felt that the overall length of all extracts combined was very reasonable.
Detailed rationale
New syllabus places decision making in the spotlight
With the new syllabus pivoting towards decision making, we wanted to reflect this shift in our
case study. Thus, we included two questions -- part b and part d -- that focus on decision
making from a firms point of view. One is in a more generic case for oligopoly firms, and
another in a more specific context of whether chocolate companies should switch to using
Fairtrade cocoa in their production.

15

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu

Emergence of Macroeconomics questions in Microeconomics case study

There is a trend in the recent years where the distinction between micro and macro case studies
is blurring. In 2014, there was a single 8 mark question testing macro concepts, and in 2015
there were three! We reflected this shift in examination philosophy by introducing a macro
question where students are asked to analyse the impact of a free trade agreement on the
standard of living of cocoa farmers in West Africa. This question draws upon information from
extracts 1, 3, and 4 and very neatly ties the entire case study together.
Setting the paper to mimic a possible 2017 A Level Paper
We wanted to set this paper with a target audience of JC2 students who are taking A levels in
2017 under the new syllabus. The wording of each question is carefully crafted based on past
year A Level questions that have appeared. As far as possible, we re-used phrasings that
Cambridge has adopted.
a(ii) takes reference from 2015 CSQ1(a): From Extract 3, identify and explain a factor that
could be responsible for the upward trend in the price of potash shown in Figure 1.
(b) takes reference from 2015CSQ2(b): Explain what is meant by the term protectionism.
(c) takes reference from 2013CSQ1(c): Explain one possible reason why the average price of
petrol in the UK in supermarkets is less than the average price in all outlets.
In the past 8 years, A level had mostly only used either Discuss or Assess as their command
words in the last two case study questions. Assess was sometimes used when evaluating
policy options or performing cost-benefit analysis. Discuss was used in all other cases.
Evaluate was never used.
(d) takes reference from 2015CSQ1(f): Discuss the factors that are likely to influence whether
the proposed new potash mining project in North Yorkshire should go ahead.
Moreover, we tried to set topics that we believe are more likely to be tested at the A Levels in
2017. This prediction is done with simple pattern analysis based on the topic analysis table and
is further described below:
1. In the years 2012 and 2013, elasticity was tested; but in 2014 and 2015, there were no
questions to apply elasticity. As such, by simple extrapolation, we expect that in 2016
and 2017 questions on elasticity will reappear. To reflect this, the last question on the
impact of free trade agreement implicitly requires students to consider price elasticity in
their analysis of tariff removal, which leads to a fall in price in European markets.
2. Overall there seems to be a shift away from generic market failure questions in the case
study paper. Our guess is that the Cambridge examiners have realised that schools
have been teaching students to produce standard responses to market failure questions.

16

QCO541 CSQ Assignment

Done by: Zhu Hanfei and Low Mei Xiu
We decided to respect this trend and avoid market failure concepts in the micro case
study.
3. Questions testing oligopoly related concepts appeared on alternating years -- 2013 and
2015. Therefore we expect such questions to appear in 2017. We included some
questions on an oligopolys pricing behaviour, emphasizing the notion of
interdependence.

17