Paper Scarcity and choice Demand and supply in product markets

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21. With the aid of a diagram, explain why

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1 summer 2014. [6]

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Demand and supply in labour markets Resource allocation

11. Using appropriate diagrams, explain why

the migration of workers from inland China
to coastal China should help to even out
wages across the country. (line 50) [4]
1.(a) Using appropriate diagrams and
examples, explain why some UK workers
earn higher wages than others. [10]
Costs, revenues and profits

1.(a) Describe the difference between normal and

abnormal profit. [2]
1.(c) Using the diagram, explain why this firm is
not productively efficient. [4]

1.(a) Identify all levels of output at which this firm

makes abnormal profit. [1]

1.(b) Calculate average fixed cost when output is

5 units. [1]

2.(a) At what level of output does the firm earn

normal profit? Justify your answer. [2]

2.(b) At what level of output does the firm

maximise its revenue? Justify your answer. [2]

2.(c) State and explain one possible social or

community objective that “Bowled Over” may
choose to pursue. [2]

8. Using a cost and revenue diagram, evaluate the

likely impact of ICT investment on a small firm’s
costs. (lines 10-14) [10] (draw diagram in space)
1. (a) Explain, using diagrams, the shape of short-
run and long-run average cost curves. [10]

22. Assuming that the firm is trying to minimise

its losses, complete the diagram below to
illustrate and explain the output and loss that the
firm makes. [4]

1.(b) With the aid of an appropriate diagram,

explain how Sea France’s profits had turned to
losses by 2008 (paragraph 2). [6]
Market structures Market failure

1.(b) Adapt the diagram above to show the area representing

the level of abnormal profit being made by the monopoly firm.
[2]
2.(a) Calculate the 2-firm concentration ratio for the selected UK
coffee shop companies. [2]

2.(b) Using an example, describe how coffee shop companies

could compete using non-price competition. [2]

2.(c) The following payoff matrix illustrates possible profit (in £

m) if Costa and Starbucks decide to compete in terms of price.
Indicate the Nash equilibrium in this scenario, and justify your
answer. [4]

5.(a) With reference to

Figure 1, describe the
difference in railway
usage when railways
1.(c) Explain two reasons why the information in the table shows were nationalised
a firm operating in a perfectly competitive market in the short compared with being
run. [4] privately run. [2]

(b) With reference to

the data, discuss the
view that
renationalisation of the
railways will lead to
2. Assess the likely market structure of the Cardiff restaurant lower prices for
market. [6] passengers. [6]

1. Explain, with the aid of a diagram, what will happen to the

level of output produced by this firm in the long-run. (shown
monopolistic competition in the short-run) [4]

3. (a) Define the term ‘interdependence’. [1]

3.(b) Using the data and your own knowledge, explain two
conditions under which price collusion is more likely to occur. [5]
 2.(b) Using examples to
support your answer,
discuss the view that
privatisation always
1.(b) Using examples to support your answer, evaluate the costs leads to greater
and benefits of business mergers. [20] efficiency. [20]
2. (a) Explain, using an appropriate diagram, the ways in which a
firm may be regarded as efficient. [10]

1. (a) Explain what is meant by a contestable market and, using a

diagram, explain why firms in a contestable market tend to earn
only normal profit. [10]

1.(b) Discuss the view that firms in an oligopoly must always be

heavily regulated in order to prevent collusion. [20]

2. (a) Explain what is meant by monopoly and, using a diagram,

explain why a monopoly may have lower average costs of
production than a firm in perfect competition. [10]
2.(b) “Concentrated markets are always better for the economy
than non-concentrated markets.” Discuss. [20]

1. (a) Using a numerical example, explain how game theory can

be used to illustrate price leadership in oligopolies. [10]
1.(b) “Oligopoly is the most desirable market structure.” Discuss.
[20]
2. (a) Explain, using diagrams, why firms in perfect competition
are regarded as efficient. [10]
2.(b) Evaluate the view that competition authorities should ban
firms from using price discrimination. [20]

23. With reference to

the data, discuss
whether it is right that
access to the health
service should be free
at the point of use. [8]

1.(c) Using the data, consider the extent to which the Dover-
Calais cross channel market might be considered to be an
oligopoly. [8]

1.(d) Consider the extent to which the Competition Commission

was correct in banning Eurotunnel from operating cross channel
ferry services. [12]

1.(e) Assess the pricing and non-pricing strategies cross channel

operators might use to increase their profits. [12]
 1.(b) Evaluate the most
appropriate policies
that the government
could implement when
trying to reduce
2.(a) Explain, using examples, why some markets may be harder income inequality in
to enter than others. [10] the UK. [20]
2.(b) Discuss the extent to which monopoly markets are
economically desirable in developed economies. [20]
Paper Macroeconomic theory

3.(a) State and outline one possible factor that could

cause the downwards shift in the short run aggregate
A2 unit 3 WJEC 1520U30-1 supply curve from SRAS1 to SRAS2. [2]

3.(b) Explain possible reasons why a Keynesian

economist might disagree that a new equilibrium at P3Y1
would be reached. [4]

7. Outline, using an AD/AS diagram, how a stronger yen

could have contributed to falling economic growth rates
in Japan. [4]

8.(b) Assess how powerful the multiplier effect of the

2012 fiscal stimulus appears to be. [4]

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A2 unit 3 WJEC (2019) 4.(a) Using Chart 1, compare and contrast the data on
1520U30-1 output gaps for the UK and the US. [4]

4.(b) With reference to all the information provided,

assess the view that a negative output gap in an
economy will always result in a fall in the rate of
inflation. [7]

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3. (a) Using an appropriate diagram, explain the process

by which Neo-classical economists believe that the
A2 unit 4 WJEC (2018) economy will always adjust to reach long-run
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3. (a) Explain, using a diagram, the shape of the short run

A2 unit 4 WJEC (2019) aggregate supply (SRAS) function and the factors which
1520U40-1 may cause it to shift. [10]
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Macroeconomic objectives

4. The following table provides information regarding

the unemployment rate (%) in Wales from 2005 to
2015. With reference to the data, discuss the likely
reasons for the patterns shown. [6]

5.(a) Calculate the index number for house prices in

Wales in 2015. Show your workings. [2]

5.(b) With reference to the data, discuss the

consequences of house-price bubbles for the Welsh
economy. [4]

9. Discuss the extent to which Japan’s high government

debt is a problem for the Japanese economy. [8]

3.(a) With reference to the data, calculate the rate of

economic inactivity in both England and Wales. [2]
6.(a) Define ‘GDP per capita at PPP’. [2]

6. To what extent does the data provide evidence to

support the quantity theory of money? [6]

3. (a) Explain, using a diagram, how increased factor

market flexibility can lead to economic growth. [10]
3.(b) “Economic growth is always beneficial for an
economy.” Discuss. [20]
4. (a) Explain, using diagrams, the shape of the short-
run and long-run Phillips curves. [10]

4.(b) Assess the extent to which a fall in unemployment

is always desirable. [20]

4.(b) Evaluate the view that deflation is always

undesirable for an economy. [20]
5. (a) Explain possible causes of a current account deficit

2.(c) With reference to the data and Figure 2, discuss

the ways in which GDP growth and deflation might be
linked. [8]

3.(a) Explain why high levels of unemployment might

be considered undesirable within an economy. [10]
Policy instruments

8.(c) Explain how the fiscal expansion in Japan in 2012 led to an increase in
the GDP growth rate in 2012 and 2013. [4]

10. Discuss the view that the Bank of Japan should raise its inflation target
from 2 % to 4 %. [8]

10. With reference to the data, discuss the view that government capital
spending is a better method of reducing inequality in China than
government current spending. [10]

5.With reference to the data, evaluate the likely relationship between a

government’s budget balance and its national debt. [7]

9. Evaluate the likely impact of ICT investment on the Welsh labour

market. [10]

4.(b) To what extent are supply side policies effective in reducing

unemployment in an economy? [20]

3.(b) Discuss the likely effectiveness of policies, other than the use of
interest rates, to reduce the rate of inflation in an economy. [20]

4. (a) Using an appropriate diagram, explain why Keynesian economists

believe that government intervention is often essential for decreasing
cyclical unemployment. [10]

3.(b) “Recession can sometimes generate benefits for an economy.”

Discuss the extent to which governments should pursue contractionary
fiscal policies. [20]
4. (a) Explain, using an AD/AS diagram, how quantitative easing should
lead to an increase in both economic growth and inflation rates. [10]
24. Discuss the extent to which the trends shown in the chart above are
likely to be beneficial for the UK economy. [6]
26. Discuss whether a cut in interest rates would be advisable in Australia
at this point in time. [8]

2.(a) With reference to the data and Figure 1, explain: (i) What is meant by
an exchange rate index; [2] (ii) Why a fall in the Yen might increase the
profits of Japanese firms. [2]
2.(b) Explain how the first arrow of Abenomics might have helped to end
deflation in the Japanese economy. [6]

2.(d) Discuss whether Japan’s entry into the Trans-Pacific Partnership is

likely to be beneficial for the Japanese economy. [10]
2.(e) To what extent do you feel that Abenomics will be effective in
creating sustained economic growth in Japan? [12]

3.(b) Evaluate the most appropriate policies the government could use to
reduce unemployment significantly in the UK at the present time. [20]
4.(a) Explain factors which might have caused the decrease in the
international competitiveness of UK businesses. [10]
4.(b) Evaluate strategies which may be used by the government to improve
the competitiveness of UK businesses. [20]
6.(a) Using diagrams, explain measures a country such as the US could
introduce to reduce its current account deficit. [10]

6.(b) Discuss whether a country should always try to reduce a deficit on

the current
account of its balance of payments. [20]
Paper International trade

6. To what extent is the eurozone an example of an

Optimal Currency Area? Refer to the data provided in
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11. With reference to the data, discuss the extent to

which Japan’s economy is likely to benefit from
increased free-trade and reduced protectionism. [8]

A2 unit 3 WJEC (2018) 3.(b) With reference to the data, discuss the view that
1520U30-1 the UK is an optimal currency area. [6]

9. With reference to the data, assess the view that

globalisation is good for the Chinese economy. [6]

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5. (a) With reference to the principle of comparative

A2 unit 4 WJEC (2017) advantage, explain the circumstances under which
1520U40-1 free international trade will be beneficial. [10]

A2 unit 4 WJEC (2018) 5. (a) Explain the factors that may result in an
1520U40-1 improving terms of trade index. [10]
 5.(b) Evaluate the extent to which increasing
A2 unit 4 WJEC (2019) integration of the world economy is beneficial to the
1520U40-1 UK. [20]

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Non-UK economies

5.(b) Evaluate the likely economic impact

of continuous expansion of the European
Union for both existing and prospective
member states. [20]
Economic development

8.(a) Explain two likely reasons why there are differences in the GDP growth
rates of low-income and high-income countries. [4]

4. With reference to the data and your own economic knowledge, outline why
high GNI per capita may not necessarily result in a high value of the Human
Development Index (HDI). [4]

6.(b) With reference to the data, evaluate the link between aid (as represented
by total aid inflow) and GDP per capita at PPP. [6]
8. Assess two reasons why GDP per capita is not always a good measure of living
standards in an economy. [6]

12. Discuss the view that economic development in China is more likely to be
achieved through free market forces rather than government intervention. [10]

10.(a) With reference to the data, describe two possible indicators of

development, other than the HDI, that could be used in response to the
increasingly digital global economy. [4]

10.(b) With reference to the data, evaluate the view that the increasingly digital
global economy will raise living standards in LEDCs. [10]

6. (a) Explain the possible ways in which a government may implement

protectionist policies. [10]

6. (b) Using examples to support your answer, discuss the reasons why the
governments of LEDCs may find it difficult to raise the level of economic
development in their country.
[20]
5.(b) Evaluate the view that running a current account surplus is always better
than running a current account deficit for LEDCs. [20]

6. (a) Explain how and why a “resource curse” may develop in an economy. [10]
6.(b) Discuss the extent to which governments of all LEDCs should encourage
inward foreign direct investment (FDI). [20]
6. (a) Explain how international aid and debt relief can help to raise the level of
development in an economy. [10]
(b) Discuss the extent to which governments in LEDCs should use protectionist
policies to increase living standards. [20]
25. With reference to the chart above, discuss the extent to which GNI per capita
is a good indicator of living standards within a country. [8]
5.(a) Explain, with examples, why having significant amounts of natural resources
can damage the economic development of a country. [10]

(b) To what extent is encouraging inward foreign direct investment (FDI) the
most appropriate policy for countries aiming to increase their level of economic
development? [20]