Component 1: Economic Principles · A520U10-1

Eduqas A-level Component 1, June 2018

All 8 written questions and 20 multiple choice questions from Eduqas A-level Component 1 (June 2018), Component 1: Economic Principles. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.

Question paperMark schemeExaminer report

Section A

Q11 mark
The construction of the HS2 rail link from London to the North of England creates an opportunity cost in the form of:
  1. AA fall in house prices along the route of the HS2 rail link
  2. BThe road infrastructure that could have been built with the same resources
  3. CThe loss of jobs in London following the completion of the HS2 rail link
  4. DA fall in demand for domestic air travel between London and the North
  5. EA rise in rail fares to help pay for the construction of HS2 rail link
Show the answer

The answer is B.

TopicThe economic problem and resource allocationDemand, supply and elasticity

Question paper p.2Mark scheme p.3Examiner report p.3Open in the tool
Q31 mark
Which one of the following would be most likely to bring about a rightward shift in the demand curve for labour?
  1. AA fall in the wage rate
  2. BAn increase in UK base interest rates
  3. CA rise in the National Living Wage
  4. DA rise in labour productivity
  5. EA fall in the cost of capital/machinery
Show the answer

The answer is D.

TopicThe labour marketMacroeconomic objectives and policyDemand, supply and elasticity

Question paper p.3Mark scheme p.3Examiner report p.3Open in the tool
Q41 mark
The cost to the government of introducing a guaranteed minimum price for an agricultural product above the free market equilibrium will be greatest if:
  1. ADemand and supply are both price inelastic
  2. BDemand is price elastic but supply is price inelastic
  3. CDemand is price inelastic but supply is price elastic
  4. DDemand and supply both have unitary price elasticity
  5. EDemand and supply are both price elastic
Show the answer

The answer is E.

TopicDemand, supply and elasticityGovernment intervention in markets

Question paper p.3Mark scheme p.3Examiner report p.3Open in the tool
Q51 mark
The diagram below shows the short run equilibrium for a firm and industry in perfect competition. At price P1 the firm produces where MC = MR and its AR is above its AC. In the long run, which one of the following would be most likely to happen to both the firm and the industry?
  1. AOutput of a firm: Rise; Output of the industry: Fall; Profit for a firm: Rise
  2. BOutput of a firm: Fall; Output of the industry: Rise; Profit for a firm: Fall
  3. COutput of a firm: Unchanged; Output of the industry: Unchanged; Profit for a firm: Rise
  4. DOutput of a firm: Unchanged; Output of the industry: Rise; Profit for a firm: Fall
  5. EOutput of a firm: Fall; Output of the industry: Fall; Profit for a firm: Fall
Show the answer

The answer is B.

TopicCosts, revenues and profitMarket structuresDemand, supply and elasticity

Question paper p.4Mark scheme p.3Examiner report p.3Open in the toolPractise the perfect competition diagram
Q61 mark
Following the removal of a tariff on a major imported product, which of the following would be expected to happen in the domestic market for that product?
  1. AConsumer surplus: Rise; Domestic producer surplus: Rise; Output of domestic firms: Fall; Total quantity bought: Rise
  2. BConsumer surplus: Fall; Domestic producer surplus: Fall; Output of domestic firms: Fall; Total quantity bought: Rise
  3. CConsumer surplus: Rise; Domestic producer surplus: Fall; Output of domestic firms: Fall; Total quantity bought: Rise
  4. DConsumer surplus: Fall; Domestic producer surplus: Rise; Output of domestic firms: Rise; Total quantity bought: Fall
  5. EConsumer surplus: Rise; Domestic producer surplus: Rise; Output of domestic firms: Rise; Total quantity bought: Fall
Show the answer

The answer is C.

TopicInternational trade and exchange rates

Question paper p.4Mark scheme p.3Examiner report p.3Open in the tool
Q71 mark
The table below shows the index of export prices and the index of import prices for a country over a six-year period. Year 1: export prices 100, import prices 100. Year 2: 108, 110. Year 3: 120, 115. Year 4: 120, 123. Year 5: 125, 125. Year 6: 131, 130. In which year were the terms of trade most favourable relative to year 1 (the base year)?
  1. AYear 2
  2. BYear 3
  3. CYear 4
  4. DYear 5
  5. EYear 6
Show the answer

The answer is B.

TopicInternational trade and exchange ratesMeasuring economic performance

Question paper p.5Mark scheme p.3Examiner report p.3Open in the tool
Q101 mark
Over the last 15 years the Indonesian government has successfully targeted poorly educated farmers in low productivity regions with information about best agricultural practice and innovative techniques. Over the same period, Indonesia's population has grown on average by about 1.3% per year. Which diagram best illustrates the impact of these changes on Indonesia's production possibility curve (agricultural goods and other goods)? (Options A to E are diagrams: see the question paper.)
Show the answer

The answer is D. Open the question paper to read the options.

TopicThe economic problem and resource allocation

Question paper p.8Mark scheme p.3Examiner report p.3Open in the toolPractise the PPF diagram
Q131 mark
In the Phillips curve diagram below, the movement from Y to Z is most likely to be explained by: (The diagram shows inflation against unemployment, with short run Phillips curves (SRPC) and the NAIRU, the natural rate of unemployment.)
  1. AA fall in inflationary expectations
  2. BA return to the NAIRU with inflationary expectations unchanged
  3. CA fall in real wages allowing the economy to self-stabilise
  4. DAn extension in aggregate demand
  5. EGovernment policy to reflate the economy
Show the answer

The answer is B.

TopicMeasuring economic performanceMacroeconomic objectives and policyAggregate demand

Question paper p.10Mark scheme p.3Examiner report p.3Open in the toolPractise the Phillips curve diagram
Q141 mark
The table below shows the output and costs for a firm producing hand-made beds over a three-month period (October, November, December). Output: 500, 450, 400 units. A Heating: £400, £500, £600. B Lighting: £100, £110, £120. C Wood: £250, £225, £200. D Interest payments: £200, £225, £225. E Insurance: £200, £0, £0. Which one of the costs is a variable cost?
  1. AHeating
  2. BLighting
  3. CWood
  4. DInterest payments
  5. EInsurance
Show the answer

The answer is C.

TopicCosts, revenues and profit

Question paper p.11Mark scheme p.3Examiner report p.3Open in the tool
Q151 mark
Two countries, Stephenia and Colinia, can produce the following output of either good X or good Y with one worker: Units of good X Units of good Y Colinia 200 or 160 Stephenia 100 or 50 Assuming that there are no transport costs, which of the following statements best summarises the trade possibilities?
  1. ATrade is not possible because Colinia is more efficient in both X and Y
  2. BTrade is possible and Colinia has a comparative advantage in X and Stephenia has a comparative advantage in Y
  3. CTrade is not possible because Colinia has a comparative advantage in both X and Y
  4. DTrade is possible and Colinia has a comparative advantage in Y and Stephenia has a comparative advantage in X
  5. ETrade is possible and Colinia has absolute advantage in X and Stephenia has absolute advantage in Y
Show the answer

The answer is D.

TopicInternational trade and exchange rates

Question paper p.12Mark scheme p.3Examiner report p.3Open in the tool
Q161 mark
A perfectly competitive firm faces the following cost and revenue situation when operating at its profit maximising output of 10 000 units. Price per unit: £20 Variable cost per unit: £18 Fixed cost per unit: £5 Other things being equal, the firm should:
  1. AContinue as it is in the short run, but close in the long run
  2. BIncrease output to spread the fixed costs over more units
  3. CShut down immediately because average total cost is above average revenue
  4. DIncrease price to over £23
  5. EReduce output in order to reduce costs
Show the answer

The answer is A.

TopicCosts, revenues and profit

Question paper p.12Mark scheme p.3Examiner report p.3Open in the tool
Q171 mark
The charts below show the market shares of supermarkets in the UK in 2014 and 2016. 2nd February 2014 UK Grocery Market Share Tesco 29.2% Sainsbury's 17.1% Asda 17.3% Morrisons 11.3% The Co-op 6.1% Aldi 4.1% Waitrose 4.9% Lidl 3.1% Iceland 2.3% Independents 1.9% 10th September 2016 UK Grocery Market Share Tesco 28.2% Sainsbury's 16.0% Asda 15.6% Morrisons 10.4% The Co-op 6.5% Aldi 6.2% Waitrose 5.4% Lidl 4.6% Iceland 2.1% Independents 1.9% From the data we can conclude that between the two dates shown:
  1. ASales of the leading four supermarkets fell
  2. BThe four firm concentration ratio fell
  3. CAldi and Lidl's profits rose
  4. DMarket concentration increased
  5. EThe smaller supermarkets all gained market share
Show the answer

The answer is B.

TopicMarket structures

Question paper p.13Mark scheme p.3Examiner report p.3Open in the tool
Q181 mark
The chart in the question paper shows the UK's fiscal/budget deficit as a percentage of GDP between 2009 and 2015. It can be concluded that over the period:
  1. AThe UK government must have increased taxes
  2. BThe UK national debt has risen
  3. CThe UK government must have increased its spending
  4. DInterest rates on government bonds must have been increasing
  5. EThe UK government's annual borrowing has fallen every year
Show the answer

The answer is B.

TopicMacroeconomic objectives and policyThe financial sectorPublic finances and the role of the state

Question paper p.14Mark scheme p.3Examiner report p.3Open in the tool

Section B

Question text is quoted from the question papers, © WJEC CBAC Ltd (Eduqas), 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.