General Structure for Paper 1 Answers

Each question has two parts: (a) and (b). Organize your response systematically for both sections.

1. Read the Question Carefully

• Highlight command terms like "explain," "evaluate," "discuss," or "analyze."
• Identify the key concepts and topics being tested.

2. Structure for Each Subpart

Part (a): Explain/Analyze (10 Marks)

1. Define Key Terms:
   • Begin by defining any relevant economic terms or concepts. E.g., “A negative externality occurs when the production or consumption of a good imposes costs on third parties.”
2. State the Theory/Concept:
   • Briefly outline the economic theory or framework relevant to the question. E.g., "Market failure occurs when the free market fails to allocate resources efficiently."
3. Include a Diagram:
   • Draw and label a relevant diagram, such as supply and demand, externalities, AD-AS, or market structures.
   • Refer to the diagram in your explanation. E.g., "As shown in the diagram, the marginal social cost curve is above the marginal private cost curve due to the externality."
4. Explain Step-by-Step:
   • Provide a logical explanation of the theory or concept.
   • Use clear cause-and-effect reasoning.
5. Application to Real Life:
   • Include a real-world example or case study if possible. E.g., “An example of a negative externality is air pollution from factories.”

Part (b): Evaluate/Discuss (15 Marks)

1. State Your Argument (Introduction):
   • Begin with a clear thesis that directly answers the question. E.g., “Government intervention to correct market failure can be effective, but it depends on implementation and market conditions.”
2. Develop Your Evaluation:
   • Discuss advantages and disadvantages or strengths and weaknesses.
   • Consider short-term vs. long-term effects.
   • Evaluate the impact on different stakeholders (e.g., consumers, producers, government).
3. Incorporate a Diagram:
   • Use a relevant diagram if applicable (e.g., AD-AS for fiscal policy or externality diagrams for subsidies).
   • Explain the diagram’s role in your evaluation.
4. Use Examples:
   • Support your arguments with real-life examples from your studies or current events. E.g., “The 2008 global financial crisis illustrates the need for government intervention through fiscal policy.”
5. Discuss Limitations and Assumptions:
   • Highlight any limitations of the theory or policy discussed.
   • Mention assumptions underlying your argument. E.g., “This analysis assumes perfect information, but in reality, governments may face information asymmetry.”
6. Provide a Conclusion:
   • Summarize your key points.
   • State the conditions under which your evaluation might change. E.g., “The success of subsidies in addressing externalities depends on accurate targeting and government budget constraints.”

3. General Tips