AQA AS Paper 1, Specimen

TopicMarket failure and government interventionExternalities

TopicPrice determination in a competitive marketIncome elasticity

TopicPrice determination in a competitive marketDemand & supply

TopicPrice determination in a competitive marketDemand & supplyIncome elasticity

TopicPrice determination in a competitive marketDemand & supply

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

TopicMarket structuresMonopoly & market power

TopicPrice determination in a competitive marketPrice elasticity of demand

TopicPrice determination in a competitive marketCommodity markets

TopicPrice determination in a competitive marketCommodity markets

TopicPrice determination in a competitive marketCommodity markets

TopicPrice determination in a competitive marketCommodity markets

1. Aaverage cost falls due to the growth of a firm.
2. Baverage cost rises due to a firm reducing its output.
3. Ctotal cost rises due to the growth of a firm.
4. Daverage cost rises due to the growth of a firm.

TopicProduction, costs and revenueCosts & economies of scale

1. Aan increase in the quantity of frozen peas supplied.
2. Ban increase in the price of frozen peas.
3. Ca change in consumer preference for frozen peas.
4. Da decrease in the price of a substitute for frozen peas.

TopicPrice determination in a competitive marketDemand & supply

1. Athe consumption of merit goods usually gives rise to positive externalities and not negative externalities.
2. Bin a free market demerit goods will be under-consumed but merit goods will be over-consumed.
3. Cmerit goods have to be provided by the government but demerit goods do not.
4. Ddemerit goods are an example of market failure but merit goods are not.

TopicMarket failure and government interventionMerit & demerit goods

1. Aimprove the allocation of resources.
2. Bcharge higher prices than firms with little market power.
3. Ccharge customers for its negative externalities in production.
4. Dincrease the elasticity of its supply curve.

TopicMarket structuresMonopoly & market power

1. Arise by the same percentage.
2. Brise by a smaller percentage.
3. Cfall by the same percentage.
4. Dremain unchanged.

TopicPrice determination in a competitive marketPrice elasticity of demandRevenue & profit

1. Aremains constant.
2. Bfalls.
3. Crises.
4. Drises and then falls.

TopicEconomic methodology and the economic problemOpportunity costPPB / PPC

1. A£300 000
2. B£200 000
3. C£100 000
4. D£80 000

TopicMarket failure and government interventionIndirect taxes & subsidies

1. AAn increase in the cost of equipment used in the production process.
2. BThe development of a successful new product by the largest firm in the market.
3. CAn increase in the degree of concentration in the market.
4. DThe removal of legal barriers to entry into the market.

TopicMarket structuresContestability & barriers

1. A–2.0
2. B–1.0
3. C–0.50
4. D–0.25

TopicPrice determination in a competitive marketPrice elasticity of demand

1. AMoney can be used only in markets where there is specialisation in production.
2. BMoney is used as a medium of exchange which aids specialisation.
3. CGreater specialisation is likely to lead to a reduction in the use of money in a market.
4. DThe use of money benefits workers more than consumers because of specialisation.

TopicEconomic methodology and the economic problemSpecialisation & division of labour

1. Aa decrease in demand for Good Z only.
2. Ban increase in demand for all three goods.
3. Ca more than proportionate increase in demand for Good Y.
4. Dan equal percentage increase in demand for Good X.

TopicPrice determination in a competitive marketIncome elasticity

1. ASellers of the good or service are unable to prevent consumers from enjoying its benefits without payment.
2. BProducers demand a higher price than some members of the public are prepared to pay.
3. COnly governments have the technical knowledge required to produce public goods and services.
4. DThey can only be produced by a monopoly firm to prevent competition from rival suppliers.

TopicMarket failure and government interventionPublic goods

1. Afirms have limited stocks of raw materials.
2. Bthere are high barriers to entry into the industry.
3. Cproduction involves the use of highly skilled labour.
4. Dfirms are operating below full capacity.

TopicPrice determination in a competitive marketPrice elasticity of supply

1. AMaintaining stable prices between different markets.
2. BEliminating shortages of goods by allowing market prices to fall.
3. CAchieving an equitable distribution of scarce resources.
4. DProviding incentives for firms to provide goods to make a profit.

TopicEconomic methodology and the economic problemEconomic systems

1. Aremains constant.
2. Bfalls over the whole range.
3. Crises at first and then falls.
4. Dfalls at first and then rises.

TopicProduction, costs and revenueProductivity & efficiency

1. AThe pattern of wealth ownership in the UK is unfair.
2. BThere are too many poor people in the UK today.
3. CThe distribution of income in the UK is unequal.
4. DThe rich should be taxed more than the poor.

TopicEconomic methodology and the economic problemPositive & normativeInequality & poverty

1. AMore consumers buying electricity.
2. BA government subsidy paid to the company.
3. CAn environmental tax levied on the company.
4. DAn increase in wages of workers in the electricity sector.

TopicPrice determination in a competitive marketDemand & supply

1. Aproducing goods and services which match people’s needs and preferences.
2. Busing their profits to finance invention and innovation.
3. Chaving production facilities of a large size, hence obtaining economies of scale.
4. Dcharging higher prices than in competitive markets.

TopicMarket structuresMonopoly & market power

1. A57%
2. B60%
3. C62%
4. D64%

TopicMarket structuresOligopoly

1. AHigh Low of scale Diseconomies
2. BLow High of scale Economies of
3. CHigh High scale Economies of
4. DLow Low scale

TopicMarket structuresMonopoly & market power