A Level Paper 1, Nov 2021

Q1(a) Identify whether each of two statements about Polish emigration since 2004 is positive or normative.

Q1(b) Explain how migration would be expected to move engineers' pay within Poland.

Q2(a) Using the data given, show on a demand and supply diagram why cobalt cheapened over the year to June 2019 (context: China trimming EV subsidies, new small DRC mines).

Q2(b) Read off the cobalt price graph and state the percentage drop recorded from June 2018 to June 2019.

Q3(a) Complete a third-degree price discrimination diagram, showing the price and profit in each sub-market (context: River Island's 10% student discount code).

Q3(b) Which condition must hold before a firm can price discriminate? (market power / storable output / product features differing by market / dearer service to some buyers)

Q4(a) Work out ticket revenue for a musical staged five times to a full 300-seat house, with seats priced at $40.

Q4(b) Given total costs of $200 000, with ticket revenue covering 30% and charitable donations 12.5%, calculate the government subsidy necessary for the production to cover all its costs.

Q4(c) Revenue maximisation requires which of these conditions to hold? (AR = AC / AR = MC / MR = AR / MR = 0)

Q5(a) Draw diagrams showing the long-run equilibrium positions for both the market and a typical firm (context: many Sicilian households selling identical lemons at the same price).

Q5(b) Where a lemon seller runs at a short-run loss, state which pairing of allocative and productive efficiency applies.

Q6(a) Using Extract A, explain how diminishing marginal productivity of labour bears on cabin crew numbers (context: United Airlines trimming crew on international flights).

Q6(b) Examine what Thomas Cook's proposed cut in airline emissions does to the social optimum, supported by an externalities diagram.

Q6(c) Drawing on Extract C, assess how far the principal-agent problem explains the collapse of Thomas Cook.

Q6(d) Using Extract C, discuss the suggested state subsidy meant to keep Thomas Cook above its shut-down point.

Q6(e) Using the data supplied, discuss Jet2's move to lift package holiday prices in the 12 hours after Thomas Cook collapsed.

Q7 Evaluate the drawbacks for one labour market — social care, say — if the national living wage climbs from £8.72 towards £10.50 hourly.

Q8 Evaluate how rising market concentration might reshape firms' decisions, choosing your own industries (context: telecoms, search, banking, social media, pharmaceuticals, health insurance).