International A Level Unit 1, Jan 2023

Q1 Identify a function performed by financial markets (collecting tax revenue / helping consumers minimise utility / channelling funds to individuals and businesses / supplying public goods)

Q2 UK consumers who stayed with the same home insurer since 2015 paid £238 against £130 for new customers, yet many stay loyal. Identify the most likely reason. (feel undervalued / good computational skills / the free-rider problem / habitual behaviour)

Q3 Selected Mexican cities have estimated demand elasticities for underground rail tickets; read off the correct verdict on elasticity and revenue.

Q4 Using a diagram of the Chinese market for 300g boxes of raisins, identify the price elasticity of supply when demand shifts from D to D1.

Q5 Philippine fuel duty spurs smuggling that costs $750m of tax yearly; classify such smuggling (market failure / government failure / consumer inertia / unobtainable production)

Q6 A small country's production possibility frontier is drawn; decide what it implies about efficiency, unemployment, opportunity cost and feasible movements.

Q10 From the table of US average incomes and car sales for 2011 and 2021, derive cars' income elasticity of demand, ceteris paribus.

Q11 With cross elasticity of +0.25 between milk and sugar-sweetened drinks, explain what a 5% rise in those drinks' prices means for the milk market.

Q7 Sketch the effect of setting Myanmar's rice floor at 270 000 kyats a tonne when the market clears at 250 000.

Q8 Explain moral hazard in a health insurance setting, where 88% of insured Americans saw a dentist against 68% of the uninsured.

Q9 Using the data given, distinguish private from external benefits, where a Tanzanian neighbour's bees lifted sunflower seed yields from 300kg to 620kg.

Q12(a) State what Extract A's term market failure means.

Q12(b) Using Extract A's opening paragraph and a demand-and-supply sketch, analyse two forces that lifted house prices over the year from March 2020.

Q12(c) Explain, drawing on Extract B, what makes newly built housing supply price inelastic.

Q12(d) Examine, using Extract C, whether New Zealand's national parks qualify as public goods.

Q12(e) Discuss the microeconomic consequences a New Zealand housing bubble would bring, using Figure 1 with Extracts A and B.

Q13 Assess two ways to cut consumers' energy bills, with a diagram, as eurozone prices rose 28.6% and Germany, Spain and France tried subsidies, tax cuts and a price cap.

Q14 Assess how fertiliser costs quadrupling would hit farmers and households, including one diagram covering the effect on farmers.