International A Level Unit 1, Oct 2020

Q1 Which of these belongs to government rather than the private sector in a mixed economy? (street lighting and other public goods / subsidies where external costs arise / taxes where external benefits arise / regulation whose administration costs run high)

Q2 Market failure is illustrated by which one of these options? (excessive administration costs of regulation / diminishing marginal utility / a stock market bubble / unintended consequences of a tax)

Q3 Choose, from four production possibility frontier diagrams, the one showing how the 2015 Nepal earthquake hit an economy running efficiently at full employment.

Q4 UK mobile phone providers offer new consumers cheaper deals than existing ones, yet many existing consumers do not switch. Identify the explanation. (good at computation / aim to maximise utility / habitual behaviour / feel valued by alternative providers)

Q5 A diagram shows the world rice market once African rice imports fell in 2019: which inference about consumer surplus, producer surplus and revenue fits?

Q6 Using a diagram of the Indian wheat market showing the introduction of a production subsidy, identify the producer incidence of the subsidy.

Q10 Using Singapore's 2016 and 2017 data on mean annual income together with new car sales, calculate income elasticity of demand for cars, other things equal.

Q11 With Pepsi's cross elasticity of demand against Coca-Cola at +1.24, explain how a 10% rise in Coca-Cola's price would probably affect Pepsi's demand.

Q7 Sketch a diagram showing what happens once Romania's gas market is capped at a price beneath equilibrium.

Q8 Using two claims about worldwide subsidies for renewable and non-renewable energy, explain how positive and normative statements differ.

Q9 South Carolina has proposed barring energy drink sales to under-18s; explain one probable effect of such a rule.

Q12(a) State what 'equilibrium' means, as Extract A uses the word.

Q12(b) Using Extract A, explain how having substitutes available shapes palm oil's price elasticity of demand.

Q12(c) Account for the 2018 fall in palm oil prices in two ways, drawing on the data and a supply and demand diagram.

Q12(d) Examine the price elasticity of supply palm oil probably shows, drawing on Figure 2 and Extract A.

Q12(e) Discuss the externalities arising when palm oil is produced, drawing on Extract B; a suitable diagram is needed.

Q13 Evaluate the impact of indirect taxes charged on petrol (context: indirect tax is 68% of the pump price in the Netherlands and 59% in Germany).

Q14 Evaluate why travel insurance is under-consumed, given 10 million UK travellers go uninsured against average medical bills of £5 620.