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Name: ....................................................
Teacher: ...................................................

A2 Economics
February Half Term Homework

Due Date Tuesday 20th February 2024

Mark
Grade/Percentage
Section A
]

Q1.
Which one of the following is a true statement about average fixed costs?
Average fixed costs

A do not change as output changes.

B fall as output increases.

C include rent and raw materials.

D equal total costs minus total variable costs.

[1 mark]

Q2.
Which one of the following is most likely to measure the degree of competition in an
oligopolistic industry?

A The price elasticity of supply in the industry

B The profitability of the 10 largest firms in the
industry
C The three firm concentration ratio
D The value of the Gini coefficient
[1 mark]

Q3.
The elasticity of supply of a particular good is more likely to be low
 ]

Q6.
The table below shows the wealth distribution for an economy in 2008 and 2012.

Percentage of wealth owned by 2008 2012

Most wealthy 1% 20 25

Most wealthy 5% 35 40

Most wealthy 10% 45 50

Most wealthy 25% 70 75

Most wealthy 50% 90 95

Between 2008 and 2012, it may be concluded that

A there has been a reduction in inequality of

income.

B there has been an increase in the wealth of all

individuals.

C there has been a reduction in inequality of

wealth.

D market failure is likely to have got worse.

[1 mark]

Q7.
The income elasticity of demand for bus travel is –1.5. This means that

A a 10% increase in fares will lead to a 15%

decrease in passengers.

B bus travel is an inferior good.

C bus travel has a negative cross elasticity of

demand.

D as unemployment falls, more people will use

buses.
Q8.
All other things being equal, which one of the following is most likely to discourage the
growth of a firm?

A Marketing economies of scale at high levels of

output

B Low unit costs of production compared with

competing firms

C An increase in market power at high levels of

output

D Diseconomies of scale at low levels of output

[1 mark]

Q9.
Which one of the following is an example of government failure?

A The government overproducing a merit good

B Government provision of national defence

C All subsidies given to private sector firms

D The government allowing free market forces to

raise the price of oil
[1 mark]

Q10.
A firm is productively efficient when

A it is operating at the lowest point on its average

cost curve.

B it cannot increase current production even if

demand for its product increases.

C output per worker cannot increase.

D an increase in production will decrease average

costs.
[1 mark]
 Section B - You should include fully labelled
diagrams in your analysis where appropriate

Q1) Write a PEEL explaining how Quantitative Easing

can be used during a recession to stimulate
economic growth.

Q2) Write a PEEL explaining one of the causes of a

current account deficit.

Write a PEEL explaining whether profit

Q3)
maximisation is still a realistic economic
objective for firms.

Q4) Write a PEEL explaining how two macroeconomic

objectives conflict.

Q5) Unemployment fell from 8% in 2013 to 5.5% in

2015. Write a PEEL explaining the likely effects
on the circular flow of income of the change of
unemployment between ee32013 and 2015.
Q6) +++
Q7)
Section C – Complete the 25 mark below in full
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