AQA · Microeconomics · Individual economic decision making
AQA Economics past paper questions: Individual economic decision making
Every AQA question on Individual economic decision making from 2017 to 2025: 8 essays and 18 multiple choice questions. It covers Behavioural economics, Utility, Imperfect information and Market failure (general). Each question links to its paper, mark scheme and examiner report.
Essay questions on individual economic decision making
Examiner insight
- What to cover
- Consumers do not know the full health effects of food, so they over-consume unhealthy food and under-consume healthy food. Sellers know more about ingredients than buyers (asymmetric information).
- Watch out
- Use examples, such as hidden sugar or misleading labels.
Examiner insight
- What to cover
- Nudges: traffic-light labelling, placing healthy food at eye level, smaller default portions, calorie counts on menus.
- Watch out
- Use named real examples.
Examiner insight
- What to cover
- Traditional theory assumes consumers have full information and maximise utility.
- Watch out
- "Always" invites a clear counter-argument with examples.
Examiner insight
- What to cover
- Consumers or producers without full information make choices that do not maximise welfare. Examples: under-consumption of merit goods such as education, over-consumption of demerit goods, adverse selection and moral hazard in insurance, asymmetric information in second-hand cars.
- Watch out
- Explain why the market fails as a result: resources are misallocated because demand does not reflect true benefit.
Examiner insight
- What to cover
- Rules of thumb (buying the usual brand, choosing the second-cheapest wine) save time but can give poor choices. Irrational behaviour (herding, habit, overconfidence, framing) means demand does not always respond to price as traditional theory predicts.
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- Use examples throughout, and say how each one changes demand, for example making it less price elastic.
Examiner insight
- What to cover
- Behavioural tools: nudges, defaults, framing. Traditional tools: taxes, subsidies, regulation.
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- Examples are required. The pension auto-enrolment scheme is a strong one.
Examiner insight
- What to cover
- Define anchoring (people judge value from a first reference point) and loss aversion (a loss feels worse than an equal gain). Apply each: a "was £100, now £60" sale anchors spending; savers keep money in low-risk accounts or hold losing shares to avoid realising a loss.
- Watch out
- Two developed examples beat a list of biases. Link each bias to a spend or save decision, as the question asks.
Examiner insight
- What to cover
- Compare traditional policies (taxes, subsidies, information, regulation) with behavioural ones (nudges, choice architecture, framing, default options).
- Watch out
- You must use both traditional and behavioural theory. Answers that ignore one side are capped.
Multiple choice questions
- A-level Paper 3, June 2025, Q1
Which one of the following best describes mandated choice?
- AS Paper 1, June 2025, Q14
Which one of the following is the best example of a situation where there is asymmetric information?
- A-level Paper 3, June 2024, Q2
A profit-maximising firm, in the service sector, needs to recruit a new employee. Which one of the following explains why asymmetric information could mean that the most suitable person is not chosen?
- A-level Paper 3, June 2024, Q8
Figure 2 shows the total utility that a consumer derives from their daily consumption of bananas. Figure 2 Based on the information in Figure 2, which one of the following statements is correct?
- A-level Paper 3, June 2023, Q7
Following flooding, described by the Environment Agency as a ‘once in a century event’, there is a sharp increase in the number of residents of a large town who buy additional flood insurance. Which one of these combinations of biases in…
- A-level Paper 3, June 2022, Q2
Which one of the following is a nudge technique that could be used to encourage healthy eating?
- A-level Paper 3, June 2022, Q21
Figure 6 shows the marginal utility that a consumer gains from eating apples. Figure 6 When 7 apples per day are consumed
- A-level Paper 3, November 2021, Q11
A person is considering buying a used motorbike from a dealer on the internet. The motorbike is described as being in perfect condition and is being offered at a correspondingly high price. In this situation, asymmetric information is most…
- A-level Paper 3, November 2021, Q13
A feature of the UK government’s workplace pension scheme is that employers are required to enrol their employees in the scheme unless the employees make a conscious decision to opt out and join another scheme. An individual choosing to…
- A-level Paper 3, November 2020, Q12
According to the hypothesis of diminishing marginal utility, when marginal utility is zero
- A-level Paper 3, November 2020, Q30
The behaviour of a consumer buying a 75-inch large screen TV is biased due to bounded rationality and the anchoring effect. This implies that the choice of which TV to buy is based on the price of
- A-level Paper 3, June 2019, Q7
The hypothesis of diminishing marginal utility
- A-level Paper 3, June 2019, Q8
A rational, utility maximising consumer is considering the purchase of a used car. Her final choice is between two cars which are identical in all respects except for the differences shown below. Period of Price guarantee against faults…
- A-level Paper 3, June 2018, Q10
Which one of the following is most likely to be associated with behavioural economic theory?
- A-level Paper 3, June 2018, Q16
A person eats six biscuits a day to maximise their total utility from the consumption of biscuits. The price of biscuits increases by 50%, leading to a change in the individual’s daily consumption of biscuits. Which one of the following…
- A-level Paper 3, June 2017, Q3
The law of diminishing marginal utility states that
- A-level Paper 3, Specimen, Q3
The table below shows the total utility of an individual’s consumption of chocolate bars. Quantity Total utility 1 100 2 180 3 250 4 300 5 330 What is the marginal utility gained by the consumption of the fourth chocolate bar?
- A-level Paper 3, Specimen, Q20
An essential difference between behavioural and traditional economic theory is that behavioural economic models assume that
Question text is quoted from the question papers, © AQA, for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.