Section A
Case study
The UK air travel sector
In the extracts: British Airways, TUI, London Gatwick, Thomas Cook, Monarch, Newquay, Ticket, Date, APD, Department for Transport and Cornwall
Q1(a)2 marks
Refer to line 11. Calculate, using information from the stimulus material, the average cost of a seat on an easyJet plane in 2018.
TopicCosts, revenues and profit
Q1(b)2 marks
Refer to lines 14–18. Explain, using evidence from the stimulus material, what is meant by joint demand.
TopicDemand, supply and elasticity
Q1(c)2 marks
Using Table 2, explain the concept of utility.
TopicMacroeconomic objectives and policy
Q1(d)4 marks
"There is certainly a strong case for the current tax-free status of jet fuel to end." (lines 36–37) Explain, using a diagram, the impact on the level of consumer surplus if jet fuel is taxed by the UK government.
TopicDemand, supply and elasticity
Q1(e)Evaluate8 marks
Evaluate two factors which may determine the value of the price elasticity of demand for air travel.
TopicDemand, supply and elasticity
Q1(f)Evaluate12 marks
Evaluate, using evidence from the stimulus material, government intervention in the market for air travel.
TopicGovernment intervention in markets
Section B
Q2OptionalEvaluate25 marks
Evaluate, using an appropriate diagram(s), whether wage differentials are mainly caused by the presence of a monopsonistic employer.
TopicMarket structuresThe labour market
Q3OptionalEvaluate25 marks
Evaluate, using an appropriate diagram(s), how a firm's objectives, other than profit maximisation, may affect its price and output decisions.
TopicCosts, revenues and profit
Section C
Q4OptionalEvaluate25 marks
Evaluate whether economic incentives are required to achieve an efficient allocation of resources.
TopicThe economic problem and resource allocation
Q5OptionalEvaluate25 marks
Evaluate how the problem of scarcity can be used to explain the requirement to make choices between free goods and economic goods.
TopicThe economic problem and resource allocation
