Unit 1: Markets in action · WEC11/01
Edexcel International AS Unit 1, January 2020
All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 1 (January 2020), Markets in action. Case studies: The markets for vanilla, education and sugar. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.
Section A
- AAn increase in the global population
- BAn increase in real incomes
- CA decrease in the price of noodles
- DA decrease in the price of rice
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The answer is D.
- AThe profit motive gives firms the incentive to be more efficient
- BPublic goods may be under-provided by the price mechanism
- CGoods may be over-provided compared with the social optimum level of output
- DGovernment intervention leads to the correction of market failure
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The answer is A.
TopicMarket failure: public goods, information and immobility
- AGovernment provision of flood defences that is greater than the social optimum output
- BDoctors prescribe too many medicines because the cost is covered by health insurance
- CL ower prices create an incentive for firms to switch production to more profitable activities
- DUnintended consequences that follow the introduction of an indirect tax
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The answer is B.
- AThe social optimum output is Q₁
- BThe market equilibrium output is Q₂
- CWelfare loss is shown by the area UVT
- DWelfare loss is shown by the area UWV
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The answer is D.
- APortugal generated 44% of its electricity from non-renewable sources
- BPortugal generated 50% of its electricity from renewable sources
- CPortugal generated most of its electricity from renewable sources
- DPortugal generated most of its electricity from non-renewable sources
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The answer is C.
- AAn increase in the price of flights for long-haul business travellers will increase total revenue for airlines
- BAn increase in the price of flights for short-haul leisure travellers will increase total revenue for airlines
- CL ong-haul business travellers are more responsive to a change in price than short-haul business travellers
- DL ong-haul leisure travellers are more responsive to a change in price than short-haul leisure travellers
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The answer is A.
Section B
Section C
Case study
The markets for vanilla, education and sugar
Extracts: Figure 1: Estimated price elasticity of supply for vanilla in Madagascar and · Figure 2: US$ price of vanilla per kilogram, 2008-2018 · Extract A: Vanilla price increases · Extract B: Lack of education in Madagascar · Extract C: Sugar tax removed in Finland · Figure 1: adapted from Developing Countries In The World Economy, Volume 42 of World Scientific Studies
In the extracts: Madagascar Adults, Scientific Studies, Finland, Jaime, Melo, Vanilla, WSPC, Developing, Estimated, Lack
Section D
Question text is quoted from the question papers, © Pearson Edexcel, 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.