Edexcel Igcse Economics Answer
Answers: Section A:
The Market System
Chapter 1
(a) In all of the photographs goods are being traded. In A, people are buying goods from market traders in a souq. In B, goods are being sold by auction. In C, shoppers are buying goods from a supermarket. And finally, in D, cars are being bought at a car lot.
(b) In C, shoppers queuing at a checkout will pay the price that is displayed on the labels of products (or at the point of sale). Shoppers will either pay the price shown or choose not to buy the various products. In D, the price is determined through negotiation between the car salesperson and the buyer. There is likely to be a price displayed for the car but this is usually a starting point for negotiations to begin. The price a car is eventually sold for will nearly always be lower than the price displayed. (c) The locations in all of the photographs may be described as markets.
Question 1:
(a) The prices of CDs in Tamer’s shop have been falling recently. He has not been able to sell the CDs because people do not want to buy them. This is because many people prefer to download music from the internet and listen to it using an iPod. Tamer has lowered prices to encourage his customers to buy CDs. However, he has been unsuccessful and the shop is being closed down.
Answers: Section A: The Market System
Getting started:
(b) Market systems encourage resources such as raw materials, land, machines and workers to flow into the thriving markets and out of the declining markets. In thriving markets prices will be rising. This means that sellers will probably be making healthy profits. These healthy profits will attract more sellers and therefore more resources will be needed to make these ‘popular’ goods. On the other hand, in declining markets, prices will be falling. This will result in sellers leaving the market and the release of the resources that they would have used. In this case, Tamer is trading in a declining market. His
The Market System
Chapter 1
(a) In all of the photographs goods are being traded. In A, people are buying goods from market traders in a souq. In B, goods are being sold by auction. In C, shoppers are buying goods from a supermarket. And finally, in D, cars are being bought at a car lot.
(b) In C, shoppers queuing at a checkout will pay the price that is displayed on the labels of products (or at the point of sale). Shoppers will either pay the price shown or choose not to buy the various products. In D, the price is determined through negotiation between the car salesperson and the buyer. There is likely to be a price displayed for the car but this is usually a starting point for negotiations to begin. The price a car is eventually sold for will nearly always be lower than the price displayed. (c) The locations in all of the photographs may be described as markets.
Question 1:
(a) The prices of CDs in Tamer’s shop have been falling recently. He has not been able to sell the CDs because people do not want to buy them. This is because many people prefer to download music from the internet and listen to it using an iPod. Tamer has lowered prices to encourage his customers to buy CDs. However, he has been unsuccessful and the shop is being closed down.
Answers: Section A: The Market System
Getting started:
(b) Market systems encourage resources such as raw materials, land, machines and workers to flow into the thriving markets and out of the declining markets. In thriving markets prices will be rising. This means that sellers will probably be making healthy profits. These healthy profits will attract more sellers and therefore more resources will be needed to make these ‘popular’ goods. On the other hand, in declining markets, prices will be falling. This will result in sellers leaving the market and the release of the resources that they would have used. In this case, Tamer is trading in a declining market. His