(10.) Economics HL. Paper 3, techniques.

You have 2 hours to write your paper 3, which is basically three essay questions. How do you use your time?

One of the most important things about paper 3 is to be concise. You are to write a total of 6 definition questions (total 12 points). Consider the following:

Equilibrium price

Which of the following would not earn two (full) marks on this definition?

Defining equilibrium price basically forces you to use the terms demand and supply. Do you have to define these terms within the definition question to earn two (full) marks?

Consider the following diagram question (worth 4 marks):

"Using an appropriate diagram, explain the likely impact of removing the 10 % indirect tax on wine (an ad valorem tax) on the supply of, and demand for, wine."

Would the following earn you full marks?

Draw two straight and parallel supply curves, with an arrow from the "inward" to the "outward" curve, and illustrating the change with arrows both on the diagram, and along the axes (e.g. q -> q1, p -> p1). Then briefly describe exactly (and no more) what has been illustrated along both axes (increase in quantity demanded/supplied, fall in price).

Definition of indirect taxation:

Expenditure tax (tax levied on goods and services)

Would this answer earn two (full) marks?

Definition of allocative efficiency:

Where price is equal to marginal cost

Would this answer, containing seven words, earn two (full) marks?

You can get a maximum of 8 marks on the evaluation question. Let's say that you talk only of relevant concepts and nail basically all the bullet points in the mark scheme, but do not refer to the article in your discussion. What is the maximum mark that you can get?

On the diagram questions, if you make only one small labelling mistake and explain everything perfectly, how many marks can you get?

Definition of tied aid:

Aid tied to the donor

This definition contains only five words! Can it still earn two (full) marks?

When labelling diagrams, it is quite useful to remember that the following is true for most diagrams:

For micro diagrams; y-axis: "price" or "cost" / x-axis: "quantity" or "output"

For macro diagrams: y-axis: "price level" / x-axis: "real output" or "real GDP"