Unit 3: Exploring Economic Behaviour · 1520U30-1
WJEC A-level Unit 3, June 2023
All 13 written questions from WJEC A-level Unit 3 (June 2023), Exploring Economic Behaviour. Each question shows its marks and topic, with an examiner insight on 5, and opens the question paper and mark scheme at the right page.
Section A
Q1(a)
Using the diagram, outline the difference between normal profit and abnormal profit.
Q1(b)
Using the diagram, explain the law of diminishing marginal returns.
Q2(a)
Calculate the following. You are advised to show your working. (i) Average fixed cost at the 4th unit of output. (ii) Marginal revenue for the 8th unit of output. (iii) Total variable cost when output is 2 units.
Q2(b)
The firm's production manager has set a target of 6 units of output each day. Assuming that the firm has the objective of profit maximisation, explain whether or not the production manager has made the correct decision.
Q3(a)
Calculate the real price of a school uniform in 2020. You are advised to show your working.
Mark splitApplication 2
TopicMeasuring economic performanceMarket structures
Q3(b)
Assess whether the UK Government should intervene in the school uniform market.
TopicMeasuring economic performanceMarket structures
Examiner insight
- What to cover
- Build both sides. For intervention: school uniform is close to a necessity with inelastic demand, exclusive supplier contracts give local monopoly power, and the cost hits low income families, an equity argument. Against: the market is contestable, and intervention has costs.
- Evaluation
- Develop each side into a chain ending in a likely economic outcome, and bring in government failure from over intervention, such as price caps reducing quality or supply.
- Watch out
- Marks were lost by under developing each side or giving a one sided answer. Use the case study data on both sides.
- How it went in the exam
- The mean for Q3 was 5.6 out of 10. AO1 and AO2 marks were commonly awarded, so the analysis chains are what separate candidates.
Q4(a)
Define the term "inflationary expectations".
Mark splitKnowledge 2
Q4(b)
"The Phillips curve relationship no longer exists." To what extent does this appear to be true in the US?
TopicMacroeconomic objectives and policy
Examiner insight
- What to cover
- State the Phillips curve relationship, an inverse link between unemployment and wage inflation, then test it against the US data in Figures 2 and 3, including the 2020 points, and use Figure 1 as well.
- Diagram
- Short run Phillips curve with a vertical long run curve at the NAIRU, showing shifts as well as movements.
- Evaluation
- Explain why the relationship may have weakened: supply side policies shifting the long run curve and the NAIRU, anchored inflation expectations, globalised labour supply. Or why it persists: low unemployment raising worker bargaining power and cost push wage inflation.
- Watch out
- Do not just compare data points to agree or disagree. Answers with no economic theory behind them scored Band 0 or Band 1 for both AO3 and AO4. Note that Figure 1 shows inflationary expectations, not inflation.
- How it went in the exam
- The mean for Q4 was 5.5 out of 12, one of the harder questions on the paper. Most candidates reached only Band 2 for AO2 because they left Figure 1 unused.
Section B
Q5
With reference to the EU, outline what is meant by economic integration.
TopicMacroeconomic objectives and policyThe financial sectorPublic finances and the role of the state
Q6
With reference to the data, describe what is meant by an optimal currency area.
Q7
Discuss the extent to which Croatia will benefit from being a member of the Euro Area (lines 8–9).
Examiner insight
- What to cover
- Keep to the Euro Area, not the EU. The benefits are the elimination of exchange rate transaction costs and currency risk, lower interest rates, stronger credit ratings and price transparency.
- Evaluation
- The costs are the loss of an independent monetary policy and of exchange rate adjustment when Croatia's cycle differs from the Euro Area's, plus the fiscal rules. Finish with a weighted judgement: whether Croatia benefits depends on how closely its cycle runs with the rest of the area.
- Watch out
- Free trade, free movement of labour and the ERDF are EU benefits, not Euro Area benefits. Both strong and weak candidates dropped significant marks by hooking into the wrong part of the case study.
- How it went in the exam
- The mean was 5.4 out of 10. Top Band 3 for AO4 needed a weighted judgement using it depends on, which only a minority produced.
Q8
Assess the likely impact of the European Regional Development Fund (ERDF) on the development of poor areas within the European Union (lines 29–30).
Examiner insight
- What to cover
- Use the specific ERDF projects in Figure 1 and link each to a development indicator such as HDI, income levels, health or education, rather than stopping at the project description.
- Evaluation
- Compare projects: large scale investment in Bulgaria or Greece against small schemes such as beekeeping equipment. Judge by the strength of the multiplier after completion, which differs between countries.
- Watch out
- A one sided answer on the benefits of ERDF projects cannot access AO4 marks at all. More candidates made that mistake here than on Q7.
- How it went in the exam
- The mean was 4.4 out of 8. AO2 marks were commonly awarded, so the gap was in the development link and the counter argument.
Q9
Discuss the view that the "the picture is not good" (line 52) in terms of the European Union's impact on global development. Refer to Figures 2 and 3 in your answer.
Examiner insight
- What to cover
- Use extract 3 and both Figures. Explain why different types of EU aid would or would not raise global development, rather than repeating the figures: which countries receive the support, and what share goes to health and education against other sectors.
- Evaluation
- Judge with a weighted conclusion. The EU gives more aid than other developed regions and deserves credit, but whether it helps global development depends on whether aid goes to the countries in greatest need or to those with closer political ties.
- Watch out
- Describing the data on both sides is not analysis. Weaker responses never linked the data to development. Note that not all countries in Figure 2 are least developed.
- How it went in the exam
- The mean was 6.1 out of 12. Data use was strong across the cohort, so analysis and the weighted judgement are the differentiators. Some candidates ran short of time on this last question.
Question text is quoted from the question papers, © WJEC CBAC Ltd, 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.