Unit 1: Introduction to Economic Principles · 2520U10-1

WJEC AS Unit 1, June 2024

All 10 written questions and 15 multiple choice questions from WJEC AS Unit 1 (June 2024), Introduction to Economic Principles. Each question shows its marks and topic, with an examiner insight on 2, and opens the question paper and mark scheme at the right page.

Question paperMark schemeExaminer report

Section A

Q21 mark
The use of expansionary demand side fiscal policy would be most likely to:
  1. AIncrease public sector debt in the economy
  2. BDecrease the level of aggregate demand in the economy
  3. CDecrease the base interest rate in the economy
  4. DDecrease the rate of inflation in the economy
  5. EIncrease the level of unemployment in the economy
Show the answer

The answer is A.

TopicMacroeconomic objectives and policyMeasuring economic performanceAggregate demand

Question paper p.2Mark scheme p.4Examiner report p.6Open in the tool
Q31 mark
Which one of the following is the most likely effect of a firm increasing its use of specialisation?
  1. AWorkers develop a greater range of skills
  2. BTrade union power falls within the firm
  3. CProduction costs per unit of output rise
  4. DProfitability falls for the firm
  5. EProductivity rises within the firm Questions 4 and 5 refer to the table below. The table below shows the cross price elasticities between fruit and other foods. Cross price elasticity of demand Food group with respect to fruit Dairy products −0.045 Meat 0.060 Fish 0.047 Vegetables −0.021
Show the answer

The answer is E.

TopicThe labour marketThe economic problem and resource allocationDemand, supply and elasticity

Question paper p.2Mark scheme p.4Examiner report p.6Open in the tool
Q61 mark
The table below shows the annual percentage change in UK real gross domestic product (GDP) from 2017 to 2021. 2017 2018 2019 2020 2021 Annual percentage 2.4 1.7 1.6 −11.0 7.6 change in real GDP From the data it can be concluded that, in the UK:
  1. AReal GDP fell between 2017 and 2019
  2. BThe economic growth rate was negative in 2018
  3. CReal GDP rose at the fastest rate in 2021
  4. DPer capita incomes rose throughout the period
  5. EThe economic growth rate was 18.6% in 2021
Show the answer

The answer is C.

TopicMeasuring economic performanceEconomic growth and the economic cycle

Question paper p.4Mark scheme p.4Examiner report p.6Open in the tool
Q71 mark
The diagram below shows a tariff being imposed on imports of barley into China at the world price P1. Price of barley (per tonne) Sdomestic P3 P2 Sworld + tariff P1 Sworld Ddomestic Q1 Q2 Q3 Q4 Q5 Quantity of barley (tonnes per year) According to the diagram, the effect of this tariff is that in China:
  1. AThe price of barley falls from P3 to P2
  2. BThe quantity of barley supplied domestically rises from Q1 to Q2
  3. CThe quantity of barley imported falls from Q5 to Q4
  4. DThe quantity of barley demanded domestically rises from Q4 to Q5
  5. EThe price of barley rises from P1 to P3
Show the answer

The answer is B.

TopicInternational trade and exchange rates

Question paper p.5Mark scheme p.4Examiner report p.6Open in the tool
Q81 mark
The chart below gives information on the exchange rate of the US dollar to the Indian rupee (the currency of India) from January 2022 to October 2022. Price of US$1 in rupees Jan Feb Mar Apr May Jun Jul Aug Sept Oct 2022 From the chart it can be concluded that, over the period shown:
  1. AUS exports became cheaper in India
  2. BThe US dollar depreciated against the Indian rupee
  3. CThe Indian central bank was using a 'managed' float system
  4. DThe Indian rupee depreciated against the US dollar
  5. EDemand for the Indian rupee rose on foreign exchange markets
Show the answer

The answer is D.

TopicInternational trade and exchange ratesThe financial sectorDemand, supply and elasticity

Question paper p.6Mark scheme p.4Examiner report p.6Open in the tool
Q91 mark
In 2021, the Welsh Government announced a £15.2 million funding package to support the regeneration of town centres in Wales. As a result of this programme, the GDP of Wales is likely to increase by:
  1. AMore than £15.2 million due to the multiplier process
  2. BMore than £15.2 million due to protectionism
  3. CLess than £15.2 million due to safe haven issues
  4. DLess than £15.2 million due to withdrawals from the circular flow
  5. EExactly £15.2 million due to the real balance effect Questions 10 and 11 refer to the sentence below. In July 2020, in response to the pandemic and to support businesses, the UK Government reduced the rate of VAT on goods and services provided by the hospitality (restaurant) sector from 20% to 5% for six months.
Show the answer

The answer is A.

TopicNational income and the circular flowInternational trade and exchange ratesAggregate demand

Question paper p.6Mark scheme p.4Examiner report p.6Open in the tool
Q111 mark
Healthy eating campaigners said that cutting the rate of VAT on junk food would lead to a less healthy population, with more people suffering from obesity and tooth decay. If true, this may be an example of:
  1. AMarket failure
  2. BMonopoly power
  3. CProgressive taxation
  4. DDiminishing marginal utility
  5. EGovernment failure
Show the answer

The answer is E.

TopicGovernment intervention in marketsPoverty and inequalityDemand, supply and elasticity

Question paper p.7Mark scheme p.4Examiner report p.6Open in the tool
Q121 mark
The chart below shows index data on the average price of a house in Wales, from 2003 to 2022 (2015 = 100). Index number (2015 = 100) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 From the data it can be concluded that, in Wales, the average price of a house:
  1. AIncreased by approximately 50% between 2015 and 2022
  2. BWas approximately £150 000 in 2022
  3. CIncreased by approximately 95% over the period shown
  4. DWas approximately £100 000 in 2015
  5. EWas lower in 2018 than in 2008
Show the answer

The answer is A.

TopicMeasuring economic performance

Question paper p.8Mark scheme p.4Examiner report p.6Open in the tool
Q131 mark
A £6.2m funding package for 2020–2022 was provided by the Welsh Government for the National Library of Wales and National Museum Wales. One reason why the Welsh Government provides museums is that:
  1. AThere is an absence of private property rights
  2. BThere is perfect information in the market
  3. CThey are free goods
  4. DThey are merit goods
  5. EThere are external costs in their production
Show the answer

The answer is D.

TopicMarket failureThe economic problem and resource allocation

Question paper p.9Mark scheme p.4Examiner report p.6Open in the tool
Q141 mark
Which one of the following correctly describes the shape of the Keynesian long run aggregate supply (LRAS) curve?
  1. AIt is perfectly inelastic at high levels of spare capacity
  2. BIt is perfectly inelastic at the full employment level of output
  3. CIt is unitary elastic at all levels of output
  4. DIt is unitary elastic at high levels of spare capacity
  5. EIt is perfectly elastic at the full employment level of output
Show the answer

The answer is B.

TopicAggregate supply

Question paper p.9Mark scheme p.4Examiner report p.6Open in the tool

Section B

Q18(c)Assess8 marks
Assess the advantages and disadvantages of using indirect taxes.
Mark splitAnalysis 4Evaluation 4

TopicGovernment intervention in markets

Examiner insight

What to cover
Give advantages and disadvantages that are specific to indirect taxes: they can cut consumption of demerit goods and correct externalities, they are harder to avoid and cheaper to collect, they are built into the price so they are less visible. Against: they are regressive, they are inflationary, and revenue is uncertain when demand is elastic.
Diagram
Indirect tax diagram with the supply shift, the new price and quantity, and the government revenue area.
Evaluation
Assess requires both sides weighed. Judge by elasticity: with inelastic demand the tax raises revenue but changes little behaviour.
Watch out
Points that would be true of any tax, such as raising revenue for public services, are treated as limited. Use technical language and keep indirect and direct taxes clearly apart. Many candidates could not reach half marks.
How it went in the exam
Examiners flagged direct and indirect taxation as a concept candidates understand poorly at a technical level, so precise definitions pay here.
Question paper p.15Mark scheme p.10Examiner report p.7Open in the toolPractise the indirect tax diagram
Q19(b)Discuss8 marks
Discuss the impacts of the Energy Price Guarantee.
Mark splitKnowledge 1Application 2Analysis 2Evaluation 3

TopicGovernment intervention in marketsDemand, supply and elasticity

Examiner insight

What to cover
The Energy Price Guarantee is a maximum price with suppliers compensated. Set out the impacts on households, on suppliers, on the government budget and on inflation, and use the data on regional prices.
Diagram
Maximum price below equilibrium, but note that the compensation means suppliers do not withdraw, so the usual shortage story needs care.
Evaluation
Do not just list advantages and disadvantages. Explain each impact, then evaluate it: how large it is, who it reaches, how long it lasts, and its cost to the taxpayer.
Watch out
Check your points are logical. Examiners rejected claims that households would move regions for cheaper energy, or that suppliers would withdraw from areas with a lower cap, since the data says suppliers were fully compensated.
How it went in the exam
Many candidates treated impacts as an advantages and disadvantages list and earned few or no AO4 marks as a result. Analyse the impact, then evaluate it.
Question paper p.17Mark scheme p.11Examiner report p.8Open in the tool

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.