Eduqas AS Component 1, October 2020

The production possibility frontier (PPF) diagram below represents Nauru's economy in the 1970s, when its major areas of economic activity were phosphate mining and agriculture. Since then Nauru's phosphate mines have become steadily less productive as the phosphates ran out, but at the same time the government invested in improving agricultural productivity. Adapt the PPF diagram to show how the factors in the data affected Nauru's economy and outline your reasons for the changes you make.

Using the data, outline what is meant by government failure.

Calculate the percentage rise in actual productivity between 2005 and 2017.

Identify two possible causes of the low productivity growth in the UK from 2011 to 2017.

To what extent can supply-side policies bring about productivity growth in the UK economy? Refer to the data in your answer.

With reference to the data, discuss the extent to which "even larger" tax cuts would be likely to significantly reduce the US government's budget/fiscal deficit.

Using calculations to support your answer, discuss which of the two policies suggested would be most likely to correct the market failures associated with the smoking of conventional cigarettes.

Calculate (i) The tax revenue generated for the government. (ii) The increase in domestic producer surplus.

Adapting the supply and demand diagram below and with reference to the data, explain why soybean prices have gone down inside the US.

Adapting the diagram below, explain the impact of these changes on wages in the financial sector in Ireland.