Component 1: Economic Principles · A520U10-1

Eduqas A-level Component 1, June 2023

All 7 written questions and 20 multiple choice questions from Eduqas A-level Component 1 (June 2023), 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 diagram below shows a country's production possibility frontiers (PPFX and PPFY) for goods and services and its GDP (point X and point Y) in two consecutive years (Year 1 = X and Year 2 = Y). Which of the following scenarios best explains the changes shown in the diagram? (The diagram is in the question paper.)
  1. AA reduction in the retirement age combined with rising consumption
  2. BA natural disaster combined with a sharp recession
  3. CIncreased international specialisation combined with a fall in imports
  4. DRising exports combined with increased investment
  5. ESharp cuts in government spending combined with increases in direct taxes
Show the answer

The answer is A.

TopicAggregate demandThe economic problem and resource allocationInternational trade and exchange rates

Question paper p.2Mark scheme p.4Examiner report p.6Open in the toolPractise the PPF diagram
Q31 mark
The diagram in the question paper shows two long run average cost curves for a firm, LRAC and LRAC1. The shift in position of the long run average cost curve for a firm in a particular industry from LRAC to LRAC1 could be the result of:
  1. AInternal managerial economies of scale
  2. BThe introduction of a national 5G network
  3. CAn increase in the national minimum wage
  4. DLower interest rates for bank loans taken out by small firms
  5. EIncreased cost of raw materials
Show the answer

The answer is B.

TopicCosts, revenues and profitMacroeconomic objectives and policyThe labour market

Question paper p.4Mark scheme p.4Examiner report p.6Open in the toolPractise the cost curves diagram
Q41 mark
The diagram below shows the demand and supply for labour in a particular industry. The demand curve has shifted from DL1 to DL2, raising the wage from W1 to W2 and employment from QL1 to QL2. This could have been the result of:
  1. AA rise in the price of the product being made by the workers
  2. BAn increase in the qualifications required to enter the industry
  3. CAn increase in the level of global competition
  4. DIncreased trade union power and workplace regulations
  5. EA fall in the cost of labour-saving capital equipment
Show the answer

The answer is A.

TopicThe labour marketDemand, supply and elasticityGovernment intervention in markets

Question paper p.5Mark scheme p.4Examiner report p.6Open in the tool
Q51 mark
In a market for a merit good, a government decides to correct the market failure by creating a subsidy for the producers. Which of the following diagrams shows both the initial welfare loss and how the market failure will be corrected? (Options A to E are diagrams: see the question paper.)
Show the answer

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

TopicMarket failureGovernment intervention in marketsDemand, supply and elasticity

Question paper p.6Mark scheme p.4Examiner report p.6Open in the toolPractise the negative externality diagramPractise the positive externality diagram
Q61 mark
The diagram below shows the markets for two products, X and Y. The supply of product X has shifted from S1 to S2. As a result, there has been a shift in demand for product Y from D1 to D2. Which one of the following combinations is true? (The diagram is in the question paper.)
  1. AThe PED for X is: Elastic; The XED between X and Y is: Negative
  2. BThe PED for X is: Elastic; The XED between X and Y is: Positive
  3. CThe PED for X is: Unitary; The XED between X and Y is: Positive
  4. DThe PED for X is: Inelastic; The XED between X and Y is: Negative
  5. EThe PED for X is: Inelastic; The XED between X and Y is: Positive
Show the answer

The answer is D.

TopicDemand, supply and elasticity

Question paper p.7Mark scheme p.4Examiner report p.6Open in the toolPractise the PED and PES diagramPractise the YED and XED diagram
Q71 mark
The diagram below shows a market in which the government sets a guaranteed minimum price for a product. It guarantees to buy any unsold units at the guaranteed price. The effect of the government increasing the minimum price from £8 to £10 will be to increase its expenditure from: (The diagram is in the question paper.)
  1. AExpenditure at £8: £160m; Expenditure at £10: £360m
  2. BExpenditure at £8: £240m; Expenditure at £10: £600m
  3. CExpenditure at £8: £240m; Expenditure at £10: £400m
  4. DExpenditure at £8: £640m; Expenditure at £10: £840m
  5. EExpenditure at £8: £640m; Expenditure at £10: £1000m
Show the answer

The answer is B.

TopicCosts, revenues and profitGovernment intervention in markets

Question paper p.9Mark scheme p.4Examiner report p.6Open in the toolPractise the minimum price diagram
Q81 mark
Questions 8, 9 and 10 use this table of a firm's costs and revenues (output: MC, AC, AR). 5: £10, £30, £40. 10: £5, £21, £35. 15: £10, £16, £30. 20: £15, £15, £25. 25: £20, £17, £20. 30: £25, £18, £15. 35: £30, £19, £10. At which level of output is the firm productively efficient?
  1. A10
  2. B15
  3. C20
  4. D25
  5. E30
Show the answer

The answer is C.

Question paper p.11Mark scheme p.4Examiner report p.6Open in the tool
Q91 mark
Questions 8, 9 and 10 use this table of a firm's costs and revenues (output: MC, AC, AR). 5: £10, £30, £40. 10: £5, £21, £35. 15: £10, £16, £30. 20: £15, £15, £25. 25: £20, £17, £20. 30: £25, £18, £15. 35: £30, £19, £10. At which level of output is the firm allocatively efficient?
  1. A10
  2. B15
  3. C20
  4. D25
  5. E30
Show the answer

The answer is D.

Question paper p.11Mark scheme p.4Examiner report p.6Open in the tool
Q101 mark
Questions 8, 9 and 10 use this table of a firm's costs and revenues (output: MC, AC, AR). 5: £10, £30, £40. 10: £5, £21, £35. 15: £10, £16, £30. 20: £15, £15, £25. 25: £20, £17, £20. 30: £25, £18, £15. 35: £30, £19, £10. At which level of output is the firm's total profit at its highest?
  1. A10
  2. B15
  3. C20
  4. D25
  5. E30
Show the answer

The answer is B.

Question paper p.11Mark scheme p.4Examiner report p.6Open in the tool
Q121 mark
The table below has information on the level of UK government debt (financial years ending March). 2011: £1214.5bn (74.9% of GDP). 2012: £1349.7bn (80.9%). 2013: £1425.6bn (82.6%). 2014: £1522.5bn (84.3%). 2015: £1604.1bn (85.7%). 2016: £1652.3bn (85.4%). 2017: £1720.5bn (85.2%). 2018: £1764.5bn (84.6%). 2019: £1821.9bn (84.2%). It can be concluded that:
  1. ABond yields rose over the period
  2. BUK government debt was falling in real terms after 2015
  3. CGDP increased faster than UK government debt after 2015
  4. DThe budget deficit rose each year
  5. EThe government reduced tax rates in each year between 2011 and 2019
Show the answer

The answer is C.

TopicMacroeconomic objectives and policyThe financial sector

Question paper p.12Mark scheme p.4Examiner report p.6Open in the tool
Q131 mark
The chart in the question paper shows consumer spending in Britain between March and June 2020, compared with the January-February average (%), for staple, delayable, work-related and social spending and the average. Which of the following can be concluded from this chart?
  1. AAverage spending in June 2020 is lower than in June 2019
  2. BSpending on delayable goods rose faster than any other type of spending between the start of April and the end of June
  3. CBy the end of June spending on staple goods was higher than spending on work-related goods
  4. DConsumer spending was at the same level as its Jan–Feb average by the end of June
  5. ESpending on social goods was lower than on any other type over the period.
Show the answer

The answer is B.

TopicMacroeconomic objectives and policy

Question paper p.13Mark scheme p.4Examiner report p.6Open in the tool
Q141 mark
The chart in the question paper gives information on US beef production and prices (% change on a year earlier) in January to May 2020. Which of the following diagrams is a possible representation of what happened in the US beef industry after March 2020? (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.

Question paper p.14Mark scheme p.4Examiner report p.6Open in the toolPractise the supply and demand diagram
Q151 mark
The diagram below shows a firm that has decided to increase its output from Q1 to Q2. The most likely impact of this decision on the firm will be: (The diagram is in the question paper.)
  1. ATo increase total profits
  2. BTo increase total revenue
  3. CTo reduce total cost
  4. DTo increase total fixed costs
  5. ETo reduce its productive efficiency
Show the answer

The answer is B.

TopicCosts, revenues and profitDemand, supply and elasticityMarket structures

Question paper p.16Mark scheme p.4Examiner report p.6Open in the toolPractise the monopoly diagram
Q161 mark
The diagram below shows a firm's total cost (TC) and total revenue curves before and after a shift in total revenue from TR1 to TR2. The shift in total revenue from TR1 to TR2 shown in the diagram is best explained by a: (The diagram is in the question paper.)
  1. APerfectly competitive firm in an industry where demand has fallen
  2. BFirm in monopolistic competition which has attracted more customers
  3. CFirm in perfect competition that has increased prices
  4. DFirm in monopolistic competition that has engaged in an unsuccessful advertising campaign
  5. EPerfectly competitive firm in an industry which some firms have left
Show the answer

The answer is A.

TopicDemand, supply and elasticityCosts, revenues and profitMarket structures

Question paper p.17Mark scheme p.4Examiner report p.6Open in the toolPractise the perfect competition diagram
Q171 mark
The charts in the question paper show indexes of Japanese export and import prices between July 2019 and April 2020. It can be concluded that:
  1. AJapan's terms of trade index was 110.65 at the end of the period
  2. BJapan's terms of trade index was worse at the end of the period than at the start
  3. CJapan's terms of trade index was 102.36 at the start of the period
  4. DJapan's exchange rate depreciated after February 2020
  5. EExport and import prices always moved in the same direction in Japan
Show the answer

The answer is A.

TopicInternational trade and exchange rates

Question paper p.18Mark scheme p.4Examiner report p.6Open in the tool
Q191 mark
The table below shows an economy's consumer price index weights (total = 1000) and the inflation rate for each good over the year. Food and drink: weight 250, inflation 10%. Housing: 300, -5%. Leisure: 200, 3%. Communications: 150, 5%. Other goods: 100, 2%. If the economy's consumer price index last year was 300, then the impact of the price changes shown would be to change the index to:
  1. A302.55
  2. B307.65
  3. C315
  4. D345
  5. E2550
Show the answer

The answer is B.

TopicMeasuring economic performance

Question paper p.21Mark scheme p.4Examiner report p.6Open in the tool
Q201 mark
Which of the following combinations shows the most likely effect of a sharp depreciation of a country's exchange rate?
  1. ATerms of trade: Improve; Current account balance: Worsen
  2. BTerms of trade: Improve; Current account balance: Improve
  3. CTerms of trade: Worsen; Current account balance: Improve
  4. DTerms of trade: Worsen; Current account balance: Uncertain
  5. ETerms of trade: Uncertain; Current account balance: Uncertain
Show the answer

The answer is D.

TopicInternational trade and exchange rates

Question paper p.21Mark scheme p.4Examiner report p.6Open 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.