Advanced level 2026 littoral mock Economics guide 1-2

This image is a Marking Guide for an Economics mock exam (Paper 2, 2026). Here are the specific questions and answers extracted from the document:

---

1. Economic Disagreements and Public Goods

a) Reasons why economists are likely to disagree:

• Different definitions stemming from various schools of thought (Neoclassicals, Keynesians, Supply-siders).

• Inadequate statistics or data.

• Differences in testing hypotheses or difficulties in the testing process.

• Economics is a young, evolving science.

• Changes in technology and a dynamic world.

• Subjectivity in government policy decisions.

• Multiple solutions existing for a single economic problem.

• The unpredictable nature of human beings.

• The unrealistic nature of some assumptions.

• Differences in cultures, religions, and traditions.

• Personal or professional bias among some economists.

• Climate changes.

  (Marking: 5 points $\times$ 2 = 10mks)

b) Public Goods:

• Definition: A public good is one that is collectively consumed.

• Characteristics:

  • Non-rivalry (or non-diminishability): One person’s consumption does not reduce the amount available to others.

  • Non-exclusion: It is impossible (or very costly) to prevent non-payers from consuming the good.

  • Non-rejectability: Individuals cannot easily opt out of “consuming” the good (e.g., national defense).

  • No market price: Usually provided without a direct fee at the point of use.

  • Government provision: Typically only produced by the government.

• Examples: Law and order, national defense, streetlights, non-toll roads, lighthouses, bridges, dams, or flood control schemes.

  (Marking: Definition 1mk, Example 1mk, 4 Characteristics explained 8mks)

---

2. Demand Concepts

a) Decrease in Demand vs. Decrease in Quantity Demanded:

• Decrease in Demand: This means less of a good is demanded at each price. It is caused by unfavorable changes in external factors (e.g., a fall in income, decrease in population, or a good going out of fashion) while the price remains constant.

• Decrease in Quantity Demanded (Contraction): This is caused specifically by a rise in the price of the good or service itself, moving along the existing demand curve.

---

Would you like me to help you practice answering these questions, or should I explain the difference between a “shift” and a “movement” on a demand curve using a diagram?