AQA Economics past paper questions: Production, costs and revenue

Essay questions on production, costs and revenue

Data response questions on production, costs and revenue

Multiple choice questions

1. A-level Paper 3, June 2025, Q7

   Table 1 shows the amount of capital, land and labour employed and the output of a firm before and after it expands to increase its productive capacity. Table 1 Before expansion After expansion Capital employed 500 units 800 units Land…

2. A-level Paper 3, June 2025, Q8

   An entrepreneur, and sole owner, has £300 000 invested in a firm. The same investment would generate an annual rate of return of 35% if it was transferred to a different market. Table 2 shows the firm’s annual total costs of production…

3. AS Paper 1, June 2025, Q5

   A firm allows customers to personalise a mug with a name of their choice, which it sells for £15. The firm pays £3 for each mug. The paint and labour cost an extra £7. The firm has fixed costs of £150 per month and in a typical month, it…

4. AS Paper 1, June 2025, Q19

   Table 3 shows indices for the total revenue and total cost for a firm in the years 2021 to 2023, with 2022 set as the base year. Table 3 Index of total revenue Index of total cost 2021 96 2022 100 100 2023 102 102.9 In 2021, the firm’s…

5. A-level Paper 3, June 2024, Q13

   Table 3 shows how the price affects the number of shirts a shop sells in a week. Table 3 Price of shirts Number of shirts sold £40 £36 £33 The marginal revenue of the 12th shirt sold is

6. A-level Paper 3, June 2024, Q18

   Figure 5 shows the short-run average cost curve (SRAC) for a firm producing electrical components. Figure 5 Which one of the following is most likely to explain the change in short-run average cost when output rises from 5 units to 10…

7. A-level Paper 3, June 2024, Q20

   A firm has a downward-sloping average revenue curve and a U-shaped average total cost curve. Which one of the following meets the condition required for the firm to be productively efficient? The firm is producing the quantity at which

8. AS Paper 1, June 2024, Q7

   A firm aims to make as much profit as possible. This means the firm should aim to

9. AS Paper 1, June 2024, Q16

   A firm sets up in an area where a local college provides training courses for the workers in that industry. This shows the firm taking advantage of

10. AS Paper 1, June 2024, Q17

    Table 2 shows an index of labour productivity per hour for a large car manufacturer. Table 2 Index of labour Year productivity per hour 2017 97.8 2018 98.6 2019 100.0 2020 89.5 2021 95.4 Which one of the following statements must be true?

11. A-level Paper 3, June 2023, Q13

    Table 2 shows the relationship between the number of workers employed by a firm and the total output of a product. The amount of other factors of production employed remains the same. Table 2 Number of workers Total output 1 2 3 4 5 103 6…

12. A-level Paper 3, June 2023, Q14

    A firm faces a downward sloping demand curve. The firm discovers that any increase or decrease from its current level of output leads to a fall in total revenue. This means that at its current output marginal revenue is

13. AS Paper 1, June 2023, Q4

    A soap manufacturer experiences a fall in long-run average costs. This is most likely to be the result of

14. AS Paper 1, June 2023, Q9

    One week, a business has to pay £80 interest for its loan, £95 for raw materials and £210 on rent. If the business has no other costs, what are its fixed costs for that week?

15. AS Paper 1, June 2022, Q3

    Figure 1 shows the long-run average cost curve (LRAC) for a firm. Figure 1 Which one of the following movements along the curve shows a reduction in diseconomies of scale?

16. AS Paper 1, June 2022, Q11

    Table 2 shows the total output of a small firm and the numbers of workers employed in each of four months. Table 2 Month Workers Total output January 12 2400 February 11 2300 March 14 2700 April 13 2500 Which one of the following is a true…

17. AS Paper 1, June 2022, Q13

    A firm normally has some fixed and variable costs in the short run. However, in the long run

18. AS Paper 1, June 2022, Q15

    A firm manufactures and sells fresh fruit drinks. The firm sells 200 bottles of fruit drink each week; its weekly total costs are £540, which includes £300 of fixed costs. The drink is sold at £4 a bottle. A rival firm drops out of the…

19. A-level Paper 3, November 2021, Q23

    All other things being equal, which one of the following is the most likely consequence of technological innovation in the production process by the firms within an industry?

20. A-level Paper 3, November 2020, Q11

    Figure 3 shows a firm’s total revenue (TR) curve. Figure 3 Which one of the following combinations, A, B, C or D, describes how the firm’s average revenue and marginal revenue will change as the firm expands its output? Average revenue…

21. AS Paper 1, June 2020, Q5

    The number of film production companies in a city increases. As a result, the pool of workers skilled in making films grows. Companies experience a reduction in their average costs. The fall in average costs results from

22. AS Paper 1, June 2020, Q6

    Table 2 shows total costs and profit for different levels of output produced by a firm. Table 2 Output Total cost (£) Profit (£) 50 1000 1000 100 1800 1700 150 2400 2400 When the firm increases its output from

23. AS Paper 1, June 2020, Q9

    An online streaming firm increased its paying subscribers by 300% over a 4-year period. The firm’s share of the total time people spent watching television doubled and profits grew rapidly. Which one of the following is the most likely…

24. AS Paper 1, June 2020, Q11

    Antonio sells ice creams in the local park. In a typical week, he sells 500 ice creams at £2 each and his total costs are £700. One week he does not work, so he sells no ice creams but his total costs are £200. What are his variable costs…

25. A-level Paper 3, June 2019, Q11

    The table below shows how a firm’s total cost of producing handbags changes as output increases. Output Total cost per month (handbags per month) (£) 0 45 000 1 000 165 000 2 000 250 000 3 000 360 000 What is the average fixed cost of…

26. AS Paper 1, June 2019, Q7

    A construction firm uses workers, machines and raw materials to build new houses. One year the firm builds 20 more houses than in the previous year. It can be concluded that there must have been an increase in

27. AS Paper 1, June 2019, Q14

    The following table shows the price of spaghetti in 3 years. Price of spaghetti Year £ per 500 g 1 3.09 2 2.75 3 2.60 Over the 3 years, it can be concluded that there has been a fall in

28. AS Paper 1, June 2019, Q18

    The following diagram shows the long-run average cost curve (LRAC) for a firm. From the diagram it can be concluded that

29. A-level Paper 3, June 2018, Q14

    The table below shows how a firm’s total and average product change, in the short run, with different inputs of labour. Number of workers Total product Average product 4 128 5 260 6 420 7 497 8 528 Diminishing marginal returns to labour…

30. A-level Paper 3, June 2018, Q20

    A firm benefits from significant and persistent economies of scale as it increases output. Which one of the following is the most likely consequence as it grows in size? The firm’s

31. AS Paper 1, June 2018, Q5

    Ben owns a small business that makes hand-made guitars. One year he sells 160 guitars, his total revenue is £78 400, and his total costs are £59 200. The average profit that Ben earns on each guitar is

32. AS Paper 1, June 2018, Q14

    The table below shows the relationship between a firm’s output and its production costs. Average variable Output Average total costs (£) costs (£) 10 50 20 40 30 35 When the firm increases its output from

33. A-level Paper 3, June 2017, Q5

    A firm employs three factors of production: capital, land and labour. The table below shows how the firm’s output is affected by changing the amount employed of these factor inputs. Labour (Number Units of output Units of capital Units of…

34. A-level Paper 3, June 2017, Q6

    The table below shows possible differences between the meanings of the terms invention and innovation. Which combination, A, B, C or D, correctly identifies the difference between the meanings of these terms? Invention Innovation Applies…

35. A-level Paper 3, June 2017, Q7

    The table below shows the output, average total cost and average revenue for a firm. Units of output Average total cost (£) Average revenue (£) 10 15 11 14 12 13 13 12 At which one of the following levels of output will the firm maximise…

36. AS Paper 1, June 2017, Q8

    In economics, the ‘long run’ refers to the time period when

37. AS Paper 1, June 2017, Q9

    The growth of car manufacturing around Birmingham led to firms producing components for cars. As a result, car manufacturing firms experienced a fall in their average cost of production. This is an example of

38. AS Paper 1, June 2017, Q10

    Claire’s sweet stall in Chorley market sells sweets in 100g bags. She has the following costs of production: Stall rental £25 per day Sales assistant’s wages £32 per day Various varieties of sweets £0.26 per 100g Paper bags £0.01 per bag…

39. AS Paper 1, June 2016, Q8

    A reduction in the market price of a firm’s product will always result in an increase in its profits or a reduction in its losses if it

40. AS Paper 1, June 2016, Q9

    The diagram below shows a firm’s average total cost curve (ATC), with the firm producing an output of OX. The firm’s productive efficiency will improve if the

41. AS Paper 1, June 2016, Q10

    All other things being equal, which one of the following situations always results in a rise in labour productivity?

42. AS Paper 1, June 2016, Q13

    The diagrams below show four possible long run average cost curves (LRAC) for a firm operating in a market where the annual sales are 400 000 units per year. All other things being equal, which one of the cost curves, A, B, C or D, is most…

43. A-level Paper 3, Specimen, Q1

    Which one of the following is a true statement about average fixed costs? Average fixed costs

44. A-level Paper 3, Specimen, Q24

    The diagram below illustrates the short-run effect on output of increasing the amount of labour employed in combination with a fixed factor of production. At which level of employment will the total output of the firm be at its maximum?

45. AS Paper 1, Specimen, Q1

    Diseconomies of scale occur when

46. AS Paper 1, Specimen, Q15

    The table below shows how the total output of a factory changes as the number of workers employed changes. Total output (in Number of units) workers 1000 100 2500 200 6000 300 7000 400 8000 500 Referring to the data in the table, what…