AQA AS Paper 1, June 2019

TopicEconomic methodology and the economic problemSpecialisation & division of labour

TopicProduction, costs and revenueProductivity & efficiencySpecialisation & division of labour

TopicPrice determination in a competitive marketDemand & supplyCommodity markets

TopicPrice determination in a competitive marketDemand & supply

TopicPrice determination in a competitive marketDemand & supplyCommodity markets

TopicMarket failure and government interventionExternalitiesGovernment intervention (micro)

TopicMarket structuresPerfect competition

TopicMarket failure and government interventionMerit & demerit goods

TopicMarket failure and government interventionMerit & demerit goods

TopicPrice determination in a competitive marketDemand & supply

TopicThe labour marketLabour demand & supply

TopicMarket failure and government interventionMerit & demerit goodsGovernment intervention (micro)

1. ALiving standards are low for many people
2. BResources are being depleted too rapidly
3. CResources are scarce relative to needs and wants
4. DResources are unequally distributed

TopicEconomic methodology and the economic problemScarcity & choice

1. A0.22
2. B0.33
3. C3
4. D4.5

TopicPrice determination in a competitive marketPrice elasticity of supply

1. AA maximum price equal to P3
2. BA minimum price equal to P2
3. CA subsidy per unit equal to P1 – P2
4. DA tax per unit equal to P3 – P2

TopicMarket failure and government interventionMerit & demerit goodsIndirect taxes & subsidies

1. Adomestic steel production is replaced by imported steel.
2. Bsome factors of production will not be fully employed.
3. Cthere is no government provision of training schemes.
4. Dthere will be underproduction of a merit good.

TopicMarket failure and government interventionMarket failure (general)Labour demand & supply

1. A1.5:1
2. B1.7:1
3. C2.0:1
4. D2.1:1

TopicMarket failure and government interventionExternalities

1. AA fall in the price of tuna sandwiches and a fall in the price of crab
2. BA new tax on food packaging and a fall in labour productivity
3. CA rise in the price of prawn sandwiches and a rise in the price of bread
4. DNew entry of firms into the sandwich market and a reduction in the minimum wage

TopicPrice determination in a competitive marketDemand & supply

1. Aemployment.
2. Bproduction.
3. Cproductive efficiency.
4. Dproductivity.

TopicProduction, costs and revenueProductivity & efficiency

1. AFalls Falls
2. BFalls Rises
3. CRises Falls
4. DRises Rises

TopicMarket structuresOligopoly

1. A£0.45 million
2. B£0.60 million
3. C£0.75 million
4. D£1.00 million

TopicMarket failure and government interventionIndirect taxes & subsidies

1. Aabuse of monopoly power will result in diseconomies of scale.
2. Bbarriers to entry are low as neither firm is a pure monopoly.
3. Cneither firm has monopoly power but benefits from economies of scale.
4. Dthe two firms have monopoly power but may also compete.

TopicMarket structuresOligopolyMonopoly & market power

1. AA decrease in revenue from socks if the price elasticity of demand is minus one
2. BA decrease in revenue from T-shirts if the price elasticity of demand is elastic
3. CAn increase in revenue from trainers if the price elasticity of demand is inelastic
4. DAn increase in revenue from trousers if the price elasticity of demand is elastic

TopicPrice determination in a competitive marketPrice elasticity of demand

1. Anon-excludability of a public good.
2. Bnon-rivalry of a public good.
3. Coptimum provision of a public good.
4. Dthe free-rider problem of a public good.

TopicMarket failure and government interventionPublic goods

1. A–0.5 0.5
2. B–0.5 –0.5
3. C–2 2
4. D–2 –2

TopicPrice determination in a competitive marketPrice elasticity of demandCross elasticity

1. Athe average cost of producing spaghetti.
2. Bthe average revenue from sale of spaghetti.
3. Cthe consumer demand for spaghetti.
4. Dthe total revenue from sale of spaghetti.

TopicProduction, costs and revenueRevenue & profit

1. Aare partly defined by the number of firms in the market.
2. Bare the rules imposed by governments which limit how firms behave.
3. Cinclude concentrated markets but not competitive markets.
4. Dinclude markets for goods but not markets for services.

TopicMarket structuresPerfect competitionMonopoly & market power

1. Amonopoly suppliers have pushed up the price of roses.
2. Bthe higher price of roses will cause demand to fall back to D1.
3. Cthe income elasticity of demand for roses is positive.
4. Dthere is greater incentive to supply roses.

TopicPrice determination in a competitive marketDemand & supply

1. Afewer people can live in rented housing.
2. Bthe rationing function of prices will improve.
3. Cthere will be a fall in supply of owner-occupied housing.
4. Dthere will be excess supply of rented housing.

TopicMarket failure and government interventionPrice controls

1. Aaverage fixed costs will fall and then rise.
2. Beconomies of scale are present at some levels of output.
3. Cthe firm will inevitably experience diseconomies of scale.
4. Dtotal costs must first fall and then rise.

TopicProduction, costs and revenueCosts & economies of scale

1. Ais an example of a normative statement.
2. Bis an example of an hypothesis that can be tested.
3. Cshows that income tax is not sufficiently progressive.
4. Dshows that the distribution of income is inequitable.

TopicEconomic methodology and the economic problemPositive & normativeInequality & poverty

1. Anumber of racing cars that can be produced for each robot given up has increased.
2. Bopportunity cost of producing robots is now lower.
3. Coutput of racing cars will be higher than the output of robots.
4. Dproductive efficiency of producing robots has risen.

TopicEconomic methodology and the economic problemPPB / PPCTechnological change