Unit 1: Markets in action · WEC11/01

Edexcel International AS Unit 1, January 2023

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 1 (January 2023), Markets in action. Case studies: New Zealand's housing market and national parks. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.

Question paper Mark scheme Examiner report

Section A

Q11 mark

1 Which one of the following is a role of financial markets?

ATo collect tax revenues
BTo enable consumers to minimise their utility
CTo make funds available for individuals and businesses
DTo provide public goods

Show the answer

The answer is C.

TopicMoney and financial markets

Question paper p.2 Mark scheme p.4 Examiner report p.3 Open in the tool

Q21 mark

Which one of the following is the most likely reason why consumers stay loyal to their insurance company?

AConsumers feel undervalued
BConsumers have good computational skills
CThe free-rider problem
DHabitual behaviour

Show the answer

The answer is D.

TopicBehavioural economics and consumer choice

Question paper p.2 Mark scheme p.4 Examiner report p.3 Open in the tool

Q31 mark

Which one of the following can be deduced from the table?

AThe demand for railway tickets in Guadalajara is price elastic
BA decrease in the price of railway tickets in Mexico City will decrease total revenue
CAn increase in the price of railway tickets in Monterrey will decrease total revenue
DThe demand for the railway tickets in all three cities will decrease in response to an increase in income

Show the answer

The answer is B.

TopicElasticities of demand and supply

Question paper p.3 Mark scheme p.4 Examiner report p.3 Open in the tool

Q41 mark

Which one of the following is the price elasticity of supply for boxes of raisins when the demand curve shifts from D to D1?

A-1.82
B-0.55
C+0.55
D+1.82

Show the answer

The answer is D.

TopicElasticities of demand and supply

Question paper p.4 Mark scheme p.5 Examiner report p.3 Open in the tool

Q51 mark

Smuggling is an example of which one of the following concepts?

AGovernment failure
BMarket failure
CUnobtainable production
DConsumer inertia

Show the answer

The answer is A.

TopicGovernment intervention and government failure

Question paper p.5 Mark scheme p.5 Examiner report p.3 Open in the tool

Q61 mark

Which one of the following can be deduced from the diagram?

AThe movement from X to Y is obtainable using current available resources
BThe movement from X to Z has an opportunity cost in terms of capital goods
CThe movement from V to W results in an increase in unemployed resources
DThe movement from W to X results from improved efficiency

Show the answer

The answer is D.

TopicThe nature of economics

Question paper p.5 Mark scheme p.5 Examiner report p.3 Open in the tool Practise the PPF diagram

Section B

Q7Draw4 marks

Draw a diagram to illustrate the impact of the introduction of this minimum price for rice.

Mark splitKnowledge 1Application 3

TopicGovernment intervention and government failure

Question paper p.6 Mark scheme p.6 Examiner report p.3 Open in the tool Draw it: minimum price diagram

Q8Explain4 marks

With reference to health insurance, explain what is meant by 'moral hazard'.

Mark splitKnowledge 1Application 1Analysis 2

TopicMarket failure: externalities

Question paper p.7 Mark scheme p.7 Examiner report p.4 Open in the tool

Q9Explain4 marks

With reference to the information provided, explain the difference between private benefits and external benefits.

Mark splitKnowledge 2Application 2

TopicMarket failure: externalities

Question paper p.8 Mark scheme p.8 Examiner report p.4 Open in the tool

Q10Calculate4 marks

Ceteris paribus, calculate the income elasticity of demand for cars between 2011 and 2021. Show your working.

Mark splitKnowledge 1Application 3

TopicElasticities of demand and supply

Question paper p.9 Mark scheme p.9 Examiner report p.4 Open in the tool

Q11Explain4 marks

Explain the likely impact of a 5% increase in the price of sugar-sweetened drinks on the market for milk.

Mark splitKnowledge 1Application 1Analysis 2

TopicElasticities of demand and supply

Question paper p.10 Mark scheme p.10 Examiner report p.4 Open in the tool

Section C

Case study

New Zealand's housing market and national parks

Extracts: Figure 1: Percentage change in house prices between March 2020 and March 2021, · Extract A: Rapid increase in house prices · Extract B: House building in New Zealand · Extract C: New Zealand's national parks · Figure 1: adapted from: https://wiseplanning.co.nz/market-and-economic-update-may-2021/ · Extract A: adapted from:

In the extracts: New Zealand's Prime Minister, Hawke's Bay, Jacinda Ardern, West Coast, House, Auckland, She, USA, According, Canterbury

Q12(a)Define2 marks

Define the term 'market failure' (Extract A, line 14).

Mark splitKnowledge 2

TopicMarket failure: public goods, information and immobility

Question paper p.12 Mark scheme p.12 Examiner report p.5 Open in the tool

Q12(b)Analyse6 marks

With reference to paragraph 1 of Extract A, analyse two reasons why house prices increased between March 2020 and March 2021. Illustrate your answer with a supply and demand diagram.

Mark splitKnowledge 2Application 2Analysis 2

TopicDemand, supply and market equilibrium

Question paper p.12 Mark scheme p.13 Examiner report p.5 Open in the tool Draw it: supply and demand diagram

Q12(c)Explain4 marks

With reference to Extract B, explain why the supply of new houses is likely to be price inelastic.

Mark splitKnowledge 2Application 2

TopicElasticities of demand and supply

Question paper p.12 Mark scheme p.14 Examiner report p.5 Open in the tool

Q12(d)Examine8 marks

With reference to Extract C, examine whether national parks in New Zealand are public goods.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicMarket failure: public goods, information and immobility

Question paper p.12 Mark scheme p.15 Examiner report p.9 Open in the tool

Q12(e)Discuss14 marks

With reference to Figure 1, Extract A and Extract B, discuss the likely microeconomic effects of a housing market bubble in New Zealand.

Mark splitEvaluation 6

TopicDemand, supply and market equilibrium

Question paper p.12 Mark scheme p.16 Examiner report p.5 Open in the tool

Section D

Q13OptionalEvaluate20 marks

Evaluate two possible measures that could be introduced to reduce the price that consumers pay for energy. Include at least one diagram in your answer.

Mark splitEvaluation 8

TopicGovernment intervention and government failure

Question paper p.22 Mark scheme p.19 Examiner report p.6 Open in the tool Draw it: maximum price diagram Or: subsidy diagram

Q14OptionalEvaluate20 marks

Evaluate the impact of the 400% increase in the cost of fertiliser on farmers and households. Include one diagram to show the impact on farmers in your answer.

Mark splitEvaluation 8

Question paper p.22 Mark scheme p.24 Examiner report p.6 Open in the tool Draw it: supply and demand diagram

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.

Section A

Section B

Section C

New Zealand's housing market and national parks

Section D

Other years of Edexcel International AS Unit 1

Topics on this paper