HIGHER ECONOMICS - EXAM TECHNIQUE Mark Moore Good morning I am delighted to be here – my aim for the next 20 minutes is to share with you a number of exam techniques to help you with your Higher Economics exam next May Forgive me if I am teaching some people of you to ‘suck eggs’ I have 6 main exam tips – all of which will be on the website – mostly pictures – along with a much large number of more detailed slides about particular areas of knowledge - written by the chief examiner for last 10 years – Mr McFarlane – teaching for 40 years and working for the exam board for 30 years

Why Bother? Because exam technique can make a significant difference to your final grade I want to start with a question – why should you be bovvered about exam technique? The answer is because it can make a significant difference to your grade next year - and it could be the difference between you getting that university place that you have set your heart on or not

Timings 1st tip: The exam is 2 hours 30 minutes long – you have 4 questions to answer – that is under 40 minutes per question - allowing your self 5 minutes to choose your questions at the beginning and 5 minutes at the end for checking leaves you with 35 minutes for each question - Need to work quickly and efficiently – it is however worth investing a few minutes to choose which of the questions to answer

Allocate your time fairly 2nd tip: Perhaps even more importantly than sticking to 35 minutes per questions – is to attempt 4 questions and the next slides show why:

Attempt 4 Questions 3 questions, @ 23 marks = 69% B 4 questions, @ 18 marks = 72% A If you only do 3 questions, albeit very very well – getting 23 marks per question – you get a B grade If however, you are disciplined and do 4 questions getting 18 on each question, NB 18 is the magic number of marks you need on each question – this gets you an A grade

Choose your Questions Carefully Work out which 2 optional questions to answer 3rd tip: Take a few minutes at the beginning to choose which 2 of the 6 optional questions you are going to answer You might also want to decide before the exam whether you are going to attempt the 2 compulsory questions first or the 2 optional ones . If it were me I would go for your best question first – i.e. do the one you think you will get the best mark on – which will give you great confidence to answer the other questions.

‘Ronseal Test’ 4th tip: Who can tell me what the Ronseal advert on TV says? Need to do exactly what the question asks you to do. Illustrate/ explain, using examples Do not be tempted to answer the question that you have learnt a set answer for – adapt your knowledge to the question

State the Obvious Define the key terms in the questions Give formulae Diagrams help Examples 5th tip: Do not forget to state the obvious – always a good idea to start a question, where relevant with a definition, any formulae, perhaps given an example – either hypothetical or real; large half page labelled diagrams are a good way to get marks quickly

Plan your Answer 5th tip: Once you have chosen your questions my next tip is to plan your answer in the margin using bulletin points – this should help you answer relevant and allow you to sort your thoughts in to a reasonable order

Hints & Tips Weekly exam question practice Weekly round-up quiz Use of interesting resources 6th tip: Because good exam technique and working efficiently are so important my next tip is to practice exam questions regularly on class In terms of knowledge – lots to understand and remember; lots of useful resources – tutor2u; weekly round-up quiz NB. What you do regularly becomes a habit – more likely to repeat it in the final exam

Summary Exam technique Practice Basic knowledge In summary – exam technique is

SECTION A – two data response items – 25 marks each - both must be attempted. Read each item slowly and carefully before looking at the questions. Try to gain an overall understanding of the passage and any diagrams, tables etc included. Remember that the items are pieces of data and not case studies. No choice – no opportunity cost. One will be predominately micro and the other one predominately macro (the Economy and International). Read each item (including the title and source) slowly and carefully before looking at the questions. A cursory glance is a recipe for disaster. With case studies, most, if not all of the answers are found in the article. With data response, although some answers are found in the data, most questions simply use the data to ask about general economic concepts.

One paper divided into two sections One paper divided into two sections. Section A – two data response questions, 25 marks each. Section B – six extended response questions, 25 marks each; two of which must be attempted. Duration – 2hours 30minutes

Discuss ‘stability’ as an economic aim. 25 marks Evaluate the effectiveness of economic forecasting agencies. 25 marks

A Internal economies of scale B Internal diseconomies of scale If a firm increases all its factor inputs by 50% and, as a result, its long run average total costs rise by 50%, which of the following has it experienced? A Internal economies of scale B Internal diseconomies of scale C Constant returns to scale D A 50% increase in total output Will give the answer at the end of the talk

The Importance of correct exam technique In Higher Economics exams, a high percentage of marks are lost because of poor exam technique rather than a lack of knowledge or understanding – especially in Section B. Briefly describe some of the causes of poor exam technique (will examine them in more detail later – apart from the first one). Poor time allocation; not reading questions carefully: failure to expand answers etc. Looking at the first one:

Allocate your scarce resource ie time, efficiently. You have 37.5 minutes per question. Try not to spend more than 40 minutes on any question. You have two and half hours to answer 4, 25 mark questions. Stick to this time allocation, more or less ie spend roughly 1 hour 15 minutes on Section A, and the same on Section B.

Never leave a question unanswered. Note the command words – describe, explain, identify etc – and do what they say. Look at the marks for each question and adjust the length of your answer accordingly. If a question is split eg (a) (i) and (ii), read part (ii) before answering part (i). Never leave a question unanswered. The marker cannot cross-subsidise the marks. If your answer to, say, (a) (i) is wrong, you will still get marks in (a) (ii) if what you say follows logically from your initial wrong statement. It’s OK to skip a question you are struggling with – as long as you remember to go back and attempt it.

SECTION B - any two of the six extended response questions – 25 marks each Carefully read all the questions in full, and take time to choose the two you will answer, to avoid making a wrong choice. Look at the marks for the dodgy parts and use them to decide which question to answer. Once you have decided which questions to attempt, do not change your mind – this wastes time. Nothing worse than being half way through a question and realising that you are doing the wrong one. The fact that all questions are integrative (ie on more than one topic), makes the choice of which questions to answer more difficult; there is often one part of every question which is not ideal for you. So:

If an ‘ideal’ question comes up, avoid spending too much time on it. Make sure you answer the question that is asked – not the one you hoped was going to be asked. Have an open mind and avoid trying to distort your model answer to fit the question. It sometimes happens that your perfect question comes up. Although this is a stroke of good luck, it can be a problem. Do not leave it to the marker to decide this or you may receive no marks for part of your answer.

Pay close attention to the command words – and obey them. Make sure you show clearly where one part of your answer ends [eg part (a)], and the next one begins. Use the marks allotted to each part of the question to judge how many points you should make. If the question asks for a specific number of points eg ‘describe two advantages for the UK of joining the eurozone’, describe two points only.

As the bulk of the marks are awarded for development the main skill students have to acquire is the ability to develop fully every answer, without drifting from the point or repeating previous points. Assume that the person marking your paper is an intelligent adult who knows very little about Economics. It’s amazing how often candidates write more for a question worth say 5 marks than they do for one worth 10 marks. If you describe more than two, the marker will only mark the first two. (Unique to Economics?) As the bulk of the marks are awarded for development (unlike Higher Bus Man), the main skill students have to acquire (largely through practice) is the ability to develop fully every answer, without drifting from the point or repeating previous points. Therefore you must develop and explain fully all your answers so that the marker can understand what you are saying.

If not, try to think of new, relevant ways of adding to it. Continually ask yourself ‘Is the answer I have just written really worth full marks?’ If not, try to think of new, relevant ways of adding to it. (be realistic). ie no marks are deducted for wrong or irrelevant statements unless they contradict each other - explain

The marking in Economics is positive. Marks are awarded for statements which are correct and relevant. If a question asks for a diagram, you will not gain full marks unless you draw one.

Answer all questions in ink – pencil fades. Make sure that all your diagrams are carefully and neatly drawn and fully labelled. It is usually a good idea to begin your answer by defining the terms used in the question. Answer all questions in ink – pencil fades. While on the subject of diagrams: Use a ruler and avoid ‘postage stamp’ diagrams. although, if the question does not ask you to do so, you can get full marks without defining the terms.

SPECIFIC ADVICE Scarcity ‘What is meant by scarcity?’ 5 marks. Scarcity is the situation where there are not enough resources to produce all the goods and services people would like to have. Questions on scarcity are asked most years but the problem is how to get 5 or 6 marks just for writing about scarcity? If the question asks, ‘What is meant by scarcity?’. 5 marks. your answer should begin, ‘Scarcity is ………’ . Do not start by talking about unlimited wants and limited resources, but simply mention that: Once you have answered the question, you can then explain how scarcity arises, but make sure that you make the link between wants and resources ie goods and services.

People in every country have unlimited wants (list the reasons) for goods and services but in every country the resources (state what they are) needed to produce the goods and services are limited. Therefore no country in the world has enough resources to produce enough goods and services to completely satisfy all its people. You can then expand your answer by mentioning that scarcity is a relative concept, is universal, is the basic economic problem, and it forces people to choose. However, to go on to talk about opportunity cost etc is irrelevant to this question.

Resource allocation – especially the price mechanism Make sure you know how changes in demand bring about changes in supply – and do not forget to mention the key role played by profit. Make sure you know the advantages of the PM as well as the disadvantages. Why government’s intervene is mainly because of market failure and how they intervene is mainly through some type of government expenditure funded by taxation. Explanations of how the PM operates are often very weak. Resource allocation questions often ask how and why governments intervene into the operation of the PM.

Efficiency Technical efficiency – maximum output from available inputs; economic efficiency – using inputs to satisfy as many wants as possible. Technical efficiency is a necessary but insufficient condition for economic efficiency. Not well answered Keep it simple Having defined them in simple terms, you can then get complicated.

PPCs Remember that PPCs show combinations of goods that can be produced. All points on the boundary are technically efficient combinations. Distinguish between movements within the curve and movements outside it Explain. Can link PPCs with technical efficiency. The former result in movements of production towards the boundary, the latter results in ? an outward shift of the boundary.

Demand and Price elasticity of demand Beware mixing up their determinants The main importance of PED is its effect on total revenue.  Do not mention regressive demand curves unless the question specifically asks about them. eg one determinant of Demand is the price of substitutes, whereas one determinant of PED is the availability of substitutes.

Price elasticity of supply. The main importance of PES is that it determines the extent to which the price of a product will change when its demand changes. A major importance of PED is that it determines the extent to which the price of a product will change when its ? changes. Questions on PES (which are not often asked) are usually poorly answered – especially regarding its significance.

Returns and Costs. Returns are output in relation to input and when returns are increasing this reduces costs and vice versa. Practice drawing MC, AFC, AVC and ATC ….. on one diagram. Questions on costs are often poorly answered because candidates do not understand what is meant by ‘Returns’, and fail to appreciate the relationship between returns and costs. (marginal, average variable and average total) (Basically)

National Income. The main problem involves the Multiplier. Many candidates fail to explain the link between spending and income ie one person’s spending is another person’s income. Questions on the applied aspects of NY (uses, problems in measuring etc) are usually very well answered and diagrams of the circular flow are invariably well drawn (although there are always some candidates who confuse injections and withdrawals).

Inflation and employment. Make sure you know the trends, and the reasons for the trends in both, for the last ten years. Questions on inflation and/or unemployment come up every year and are usually well answered.   Most candidates understand the causes of inflation and unemployment (but rarely mention that a major cause of inflation is inflation), costs and cures, but are weak on their recent history.

Government in the economy. Remember that government aims can complement as well as conflict. Fiscal policy – do not confuse Budget deficits with Trade deficits. Understand how Budget deficits and surpluses affect AMD and therefore affect inflation, employment, growth and trade. For example, measures to increase economic growth should also reduce unemployment. Many candidates do

Current Monetary policy aims to set interest rates to achieve the government’s inflationary target. It is therefore aimed at controlling inflation – not necessarily reducing it. Know how and why interest rate changes affect such variables as: borrowing, saving, investment, mortgage payments, real income, spending and exchange rates.

International Trade. Absolute advantage and comparative advantage are easier to explain in terms of opportunity cost than by using figures.

Balance of Payments Need to be able to describe the current and capital accounts and explain how transactions in the latter lead to transactions in the former. Be aware of the UK B of P over the last few years. Know the reasons for our Balance of Trade deficits and our surpluses in services.  Be aware of the advantages as well as the disadvantages of trade deficits.  If asked about measures to cure trade deficits, do not base your answer solely on import controls. Can use the modern structure, but the traditional one (current and capital accounts) is OK. Especially the reasons for the trends in Trade in Goods and Services.

Exchange rates When describing the factors which influence the demand for and supply of sterling, make sure you mention flows of ‘hot money’. Be aware of recent trade developments. Exchange rates come up nearly every year in some form or other. You can also describe the factors which affect the factors eg relative interest and inflation rates. eg the impact of the growth of the Chinese economy.  

The international environment. The EU  Three important aspects.  The operation and reform of the CAP The effects of EU enlargement The arguments for and against the UK adopting the euro

Developing economies Questions on developing economies tend now to concentrate more on the effectiveness of different types of aid, rather than the characteristics of developing economies. You should also be aware of the benefits and importance of free trade and debt relief. You should note that ‘sustainable development’ was recently added at the end of the syllabus. The main aim of all aid should be to increase the growth rates in DCs.

ALL THE VERY BEST ON MAY 26TH The multiple choice answer is ………. B