Unit 1: Markets in action · WEC11/01

Edexcel International AS Unit 1, October 2023

All 12 written questions and 6 multiple choice questions from Edexcel International AS Unit 1 (October 2023), Markets in action. Case studies: The market for fertiliser. 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 an example of government failure?

AMarket forces eliminating excess supply of a product by enabling its price to fall
BA market bubble emerging in the value of shares on the stock exchange
CThe introduction of a tax that causes a decrease in external costs
DThe introduction of a tax that causes an increase in smuggling

Show the answer

The answer is D.

TopicDemand, supply and market equilibrium

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

Q21 mark

Which one of the following might have caused this change in the country's production possibilities?

AA natural disaster
BA rise in the rate of unemployment
CAn improvement in technology
DAn increase in the number of immigrants

Show the answer

The answer is A.

TopicThe nature of economics

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

Q31 mark

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

ADemand for all three car types is price inelastic
BDemand for all three car types is price elastic
CAn increase in the price of diesel cars will result in an increase in the total revenue for diesel car manufacturers
DAn increase in the price of electric cars will result in an increase in the total revenue for electric car manufacturers

Show the answer

The answer is C.

TopicElasticities of demand and supply

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

Q41 mark

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

AThe market equilibrium quantity is at Q2
BThe social optimum quantity is at Q1
CThe welfare gain area would be equal to UVW
DThe welfare gain area would be equal to UWX

Show the answer

The answer is D.

TopicDemand, supply and market equilibrium

Question paper p.4 Mark scheme p.3 Examiner report p.3 Open in the tool Practise the positive externality diagram

Q51 mark

Which one of the following concepts best describes the behaviour of staff at these banks?

AInertia
BThe free-rider problem
CMoral hazard
DMarket bubble

Show the answer

The answer is C.

TopicDemand, supply and market equilibrium

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

Q61 mark

Which one of the following can be deduced from the diagram about the relationship between PlayStation 5 games consoles and Xbox Series X games consoles?

AThey are substitutes
BThey are complements
CThey are unrelated goods
DThey are inferior goods

Show the answer

The answer is A.

TopicDemand, supply and market equilibrium

Question paper p.5 Mark scheme p.4 Examiner report p.3 Open in the tool Practise the YED and XED diagram

Section B

Q7Draw4 marks

Draw a diagram to illustrate the likely impact of this change in consumers' real incomes on the equilibrium price and quantity for domestic holidays in Laos.

Mark splitKnowledge 1Application 3

TopicDemand, supply and market equilibrium

Question paper p.6 Mark scheme p.5 Examiner report p.3 Open in the tool Draw it: supply and demand diagram

Q8Explain4 marks

With reference to switching banks, explain the difference between 'herding' and 'inertia'.

Mark splitKnowledge 2Application 2

TopicBehavioural economics and consumer choice

Question paper p.7 Mark scheme p.6 Examiner report p.3 Open in the tool

Q9Explain4 marks

With reference to Thailand, explain one role of financial markets.

Mark splitKnowledge 1Application 1Analysis 2

TopicMoney and financial markets

Question paper p.8 Mark scheme p.7 Examiner report p.4 Open in the tool

Q10Calculate4 marks

Ceteris paribus, calculate the price elasticity of supply for cocoa. Show your working.

Mark splitKnowledge 1Application 3

TopicElasticities of demand and supply

Question paper p.9 Mark scheme p.8 Examiner report p.4 Open in the tool

Q11Explain4 marks

Explain the impact of the introduction of this indirect tax on the market for paperback books sold online in Vietnam. Illustrate your answer with an appropriate diagram.

Mark splitKnowledge 1Application 1Analysis 2

TopicGovernment intervention and government failure

Question paper p.10 Mark scheme p.9 Examiner report p.4 Open in the tool Draw it: indirect tax diagram

Section C

Case study

The market for fertiliser

Extracts: Figure 1: World price of fertiliser, $ per tonne, January 2021 to September 2022 · Figure 1: adapted from: · Extract A: adapted from: · Extract B: adapted from: · Extract C: adapted from:

In the extracts: Hurricane Ida, USA, Another, Fertiliser, Higher

Q12(a)Define2 marks

Define the term 'tradeable pollution permit scheme'. (Extract B, line 16)

Mark splitKnowledge 2

TopicMarket failure: externalities

Question paper p.12 Mark scheme p.10 Examiner report p.5 Open in the tool

Q12(b)Explain4 marks

With reference to Extract B, explain whether the supply of phosphate rock is likely to be price elastic or price inelastic.

Mark splitKnowledge 2Application 2

TopicElasticities of demand and supply

Question paper p.12 Mark scheme p.11 Examiner report p.5 Open in the tool

Q12(c)Analyse6 marks

With reference to Figure 1 and Extract A, analyse one demand factor and one supply factor that caused the price of fertiliser to increase between January 2021 and April 2022. 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.12 Examiner report p.5 Open in the tool Draw it: supply and demand diagram

Q12(d)Examine8 marks

With reference to Extract C, examine two likely effects of the subsidies paid by Canada's Government to farmers who use more organic farming methods.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicGovernment intervention and government failure

Question paper p.12 Mark scheme p.14 Examiner report p.8 Open in the tool Practise the subsidy diagram

Q12(e)Discuss14 marks

With reference to Extract B, discuss the external costs associated with the production and the use of fertiliser. Illustrate your answer with an appropriate diagram.

Mark splitEvaluation 6

TopicMarket failure: externalities

Question paper p.12 Mark scheme p.15 Examiner report p.5 Open in the tool Draw it: negative externality diagram

Section D

Q13OptionalEvaluate20 marks

Evaluate the microeconomic effects of an increase in the maximum price of electricity.

Mark splitEvaluation 8

TopicGovernment intervention and government failure

Question paper p.22 Mark scheme p.17 Examiner report p.6 Open in the tool Practise the maximum price diagram

Q14OptionalEvaluate20 marks

Evaluate the microeconomic effects of imperfect information on insurance markets.

Mark splitEvaluation 8

TopicMarket failure: public goods, information and immobility

Question paper p.22 Mark scheme p.20 Examiner report p.6 Open in the tool

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

The market for fertiliser

Section D

Other years of Edexcel International AS Unit 1

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