125 questions from the AQA A-Level Economics papers, 2017–2024, covering Microeconomics. Every question links to the official mark scheme at the page its answer begins on.
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Inflation resulted in a basket of goods and services that cost £100 in 2015 costing £112 in 2021. Using this information and the data in Extract A (Table 1), calculate the percentage increase in average university rent, in real terms, between 2015 and 2021. Give your answer to one decimal place.
Explain how the data in Extract A (Figure 1 and Table 1) show that the supply of university and private rental accommodation has failed to match the increase in student numbers between 2015 and 2021.
1.3.3 Determinants of Supply
Extract B (lines 3–4) states that ‘Universities have expanded the number of places on offer to students, but the supply of student accommodation is highly inelastic’. With the help of a diagram, explain the impact of the increase in the number of students attending university on the market for student accommodation.
1.3.5 Equilibrium Market Prices · 1.3.4 Price Elasticity of Supply
Extract C (lines 14–16) states that ‘A maximum rent can help keep the cost of student accommodation lower than it would otherwise be, but risks some landlords withdrawing from the market’. Using the data in the extracts and your knowledge of economics, discuss the advantages and disadvantages of policies the government might introduce to improve the market for student accommodation.
Using the data in Extract D (Table 2), calculate the difference between the mean percentage trade union membership in the private sector and the mean percentage trade union membership in the public sector over the period 2001–2021. Give your answer to one decimal place.
Explain how the data in Extract D (Figure 2), show that, since 2015, living standards of people working in the private sector are likely to have increased compared to those working in the public sector.
1.6.3 Wages in Competitive Labour Markets
Extract E (lines 9–10) states that ‘In November 2022, 13.3% of businesses reported experiencing a shortage of workers leading to upward pressure on wages’. With the help of a diagram, explain how and to what extent a shortage of labour is likely to affect the wage in a competitive labour market.
Extract F (lines 12–13) states that ‘Collective pay bargaining, reinforced by the threat of strikes, has achieved some notable successes for workers’. Using the data in the extracts and your knowledge of economics, evaluate the view that trade unions improve the operation of labour markets by protecting the interests of workers.
Explain why imperfect and asymmetric information may lead to market failure in the market for food.
1.2.2 Imperfect Information · 1.8.6 Market Imperfections
Evaluate the view that the consumption of unhealthy foods can best be reduced through the use of nudges and other techniques from behavioural economics.
1.2.4 Behavioural Economics and Policy · 1.8.5 Merit and Demerit Goods
Explain the likely impact on consumer surplus and producer surplus as an industry moves away from a competitive market structure to one that is dominated by a few large firms.
1.5.11 Consumer and Producer Surplus
Evaluate the view that price discrimination is damaging for consumers.
1.5.7 Price Discrimination
Explain, using examples, how the existence of economies and diseconomies of scale affect firms’ average costs of production.
1.4.5 Economies and Diseconomies of Scale
Assess the view that privatised industries, such as electricity and gas, should be taken back into public ownership.
To what extent, if at all, do the data suggest that people living in the South East (SE) of England are better off than people living in the North East (NE) of England?
Using the data in Extract A (Table 1), calculate the index of total car sales in 2021 if, in the base year, total car sales were 1.25 million. Give your answer to two decimal places.
Explain how the data in Extract A (Table 1 and Figure 1) show that developments in the car market are the main reason for the changing demand for lithium-ion batteries in the UK.
Extract C (lines 3–4) states that ‘the mining, manufacturing and disposal process for batteries could soon become an environmental disaster.’ With the help of a diagram, explain why the production and sale of lithium-ion batteries might lead to market failure.
Extract B (lines 20–21) states that ‘all vehicle owners should be forced to pay the full costs of their driving. This would incentivise people to consider using public transport, cycling or walking.’ Evaluate policies that could be used to reduce the environmental impact of all types of car.
Use the data in Extract D (Figure 2) to calculate the difference between the mean and median rate of growth of working households’ real pre-tax earnings, over the period 1994–2017.
Explain how the data in Extract D (Figure 3) show that employment is an increasingly ineffective protection against poverty.
Extract E (lines 19–20) states that ‘Some out-of-work benefits have not kept up with inflation, putting downward pressure on wages, contributing to the rise in in-work poverty.’ With the help of a diagram, explain how a reduction in out-of-work benefits may lead to lower wages in some labour markets.
Extract F (lines 1–2) states that ‘Charities and think tanks have called for action to reduce job insecurity, lower housing costs and increase earnings for low-paid workers.’ Using the extracts and your knowledge of economics, evaluate policies that could be used to reduce in-work poverty in the UK.
Explain why, in long-run equilibrium, monopolistically competitive markets are neither productively nor allocatively efficient.
1.5.4 Monopolistic Competition · 1.5.10 Market Structure and Efficiency
Assess the view that competition policy is likely to lead to markets becoming less efficient in the long run.
Explain the determinants of the supply of labour to an industry.
Evaluate the view that labour markets work best when strong monopsony power is balanced by trade union power.
1.6.4 Wages in Imperfect Labour Markets · 1.6.5 Trade Unions
Explain how market contestability affects the performance of an industry.
1.5.9 Contestable Markets
Discuss the view that privatisation is always beneficial because it leads to improvements in efficiency.
Explain possible reasons for fluctuations in the world market price of tea.
1.3.5 Equilibrium Market Prices · 1.3.4 Price Elasticity of Supply
Using the data in Extract A (Figure 1), calculate the number of workers doing weekly platform work in 2019 for each worker doing monthly platform work in 2019. Give your answer to two decimal places.
Explain how the data in Extract A (Figure 2) show that the incentive for workers to become self-employed increased between 2009/10 and 2018/19.
Extract C (lines 4–5) states that, as a result of trade union action, ‘The hospital trust increased their £8.21 minimum wage to the London Living Wage of £10.75.’ With the help of a diagram, analyse how a trade union might achieve higher pay for its members.
Extract B (lines 16–18) states that, ‘Gig economy defenders claim that today’s flexible labour markets offer modern workers the opportunity to move freely between jobs and this gives them more choice over their working hours.’ Assess the view that government intervention in the UK labour market is necessary to protect the interests of people who are working in the gig economy.
1.6.2 The Supply of Labour · 1.6.4 Wages in Imperfect Labour Markets
Using the data in Extract D (Figure 3), calculate, in percentage terms, how much more expensive a basket of groceries at Waitrose was than at Lidl in April 2020. Give your answer as a percentage to two decimal places.
Explain how the data in Extract D (Figure 4) show that the supermarket sector is competitive.
1.5.1 Market Structures
Extract E (lines 16–17) states that, ‘Supermarkets set prices interdependently, and price wars look very likely.’ With the help of a diagram, analyse the impact on grocery consumers of interdependence between supermarkets.
Extract E (lines 17–19) states that, ‘the price gap between discounters and conventional supermarkets is now about 10–12%, against more than 20% a few years ago.’ Evaluate the view that the supermarket sector is serving customers' interests well.
Explain how the price mechanism allocates resources in a market economy.
1.8.1 The Price Mechanism
Assess the view that high-speed Internet connection is a necessity for modern life and should be provided by the government, free of charge, to all households.
1.8.3 Public and Private Goods · 1.8.9 Government Intervention
Explain the difference between complete and partial market failure.
1.8.2 The Meaning of Market Failure
Evaluate the view that government failure means that government intervention in markets will rarely lead to an improvement in economic welfare.
1.8.10 Government Failure
Explain the main causes of inequality in the distribution of pre-tax incomes.
Evaluate whether the best way to reduce inequality in disposable income is to reduce differences in pre-tax incomes rather than through taxes and welfare benefits.
To what extent do the data support the view that Boeing has been more successful than Airbus since 2014? You must use the data in Extract B to support your assessment.
Explain the factors that a commercial aircraft manufacturer, such as Boeing or Airbus, should consider when forecasting the future sales of its aircraft.
After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the UK government provides financial and other support to companies involved in the production of commercial aircraft? Justify your recommendation.
Using the data in Extract A (Figure 1), calculate the mean amount of profit that pharmaceutical companies would have made on a new drug in 2019, given that the average development cost was $2.6bn. Give your answer to the nearest million dollars.
Explain how the data in Extract A (Figure 2) show that greater competition leads to lower prices in the market for generic drugs.
Extract B (lines 9–10) states: ‘After the monopoly’s patent expires, other companies can manufacture and market the same drug under its generic name, usually at a lower price.’ With the help of a diagram, explain why prices of pharmaceutical drugs supplied by a monopoly are likely to be higher than in markets which are more competitive.
1.5.6 Monopoly and Monopoly Power · 1.5.9 Contestable Markets
Extract C (lines 1–3) states: ‘The market for most generic drugs is oligopolistic, with just two or three manufacturers making each product. This enables significant economies of scale within firms, but also presents the risk of consumer interests being harmed.’ Using the extracts and your knowledge of economics, assess the view that the market structure of the pharmaceutical industry is damaging for consumers.
Using the data in Extract D (Figure 3), calculate how much a worker of Bangladeshi ethnicity earned on average in 2018, given that a White British worker earned £28 677. Give your answer to the nearest pound.
Explain how the data in Extract D (Figure 4) show that the ethnic pay gap is more significant for older ethnic minority employees.
Extract F (lines 18–19) states: the Government ‘could also take steps to recognise foreign qualifications, thus removing obstacles for well-qualified foreign-born workers.’ With the help of a diagram, explain how UK firms not recognising foreign qualifications may lead to some ethnic groups receiving lower pay.
Extract E (lines 3–4) states: ‘significant pay gaps remain, even when education and occupation are taken into account, particularly for those born outside the UK.’ Using the extracts and your knowledge of economics, evaluate possible government policies to reduce the ethnic pay gap.
Explain how perfect competition should lead to outcomes which are both productively and allocatively efficient.
1.5.3 Perfect Competition · 1.5.10 Market Structure and Efficiency
Evaluate the view that technological change tends to bring industries closer to the market structure of perfect competition.
1.4.8 Technological Change · 1.5.8 The Dynamics of Competition
Explain how the concept of cross elasticity of demand can be used to understand the relationship between markets.
1.3.2 Elasticities of Demand · 1.3.6 Interrelationship between Markets
Discuss the view that individual economic agents will always act as rational decision makers so as to maximise their utility.
1.2.1 Consumer Behaviour · 1.2.3 Behavioural Economic Theory
Explain how a firm may benefit from both internal and external economies of scale.
1.4.5 Economies and Diseconomies of Scale
Discuss how the divorce of ownership from control may affect both the conduct and performance of firms.
1.5.2 The Objectives of Firms
The UK government has set a target to reduce net greenhouse gas (GHG) emissions to zero by 2050. To what extent, if at all, do the data suggest that to achieve its net-zero emissions target, the government should focus on reducing GHG emissions from the transport sector? You must use the data in Extract C to support your assessment.
Explain why, without government intervention, markets are likely to allocate too few resources to dealing with the problem of climate change.
1.8.2 The Meaning of Market Failure · 1.8.4 Externalities
After considering Extract E, and the original evidence in Extracts A, B, C and D, which policies, if any, would you recommend that the UK government should introduce to ensure that it achieves its zero-emissions target by 2050. Justify your recommendation.
Using the data in Extract A (Figure 1) calculate the percentage of all plastics produced in the period 1950–2015 which have either been sent to landfill or incinerated. Give your answer to one decimal place.
Explain how the data in Extract A (Figure 2) show that higher living standards lead to greater volumes of waste per capita being produced.
Extract B (lines 8–10) states: ‘many companies intentionally make it difficult to repair their products in order to increase sales. This is both economically inefficient and environmentally foolish; it imposes costs on the environment even though it may make sense for individual companies.’ With the help of a diagram, explain how the production of goods which are designed not to last long may result in market failure.
1.8.6 Market Imperfections · 1.4.8 Technological Change
Extract C (lines 17–19) states: ‘Many environmental economists suggest that making firms pay for the costs of landfill associated with their products, or taxing raw material inputs, will be necessary to ensure a sustainable future for all.’ Using the extracts and your knowledge of economics, evaluate policies, if any, that governments in developed countries should pursue to reduce waste and encourage the recycling of waste products.
Using the data in Extract D (Figure 3), calculate how much the median care worker earns for every pound earned by the median worker in the whole economy. Give your answer to the nearest penny.
1.6.3 Wages in Competitive Labour Markets
Explain how the data in Extract D (Figure 4) show that there is likely to be substantial upward pressure on the wages of care workers by 2041.
Extract E (lines 5–7) states: ‘Until the 1990s, almost all workers in the care sector were employed by the government, which acted as a monopsonist by keeping wages low.’ With the help of a diagram, explain how a monopsonistic public sector can lead to low pay for social care work.
1.8.8 Privatisation and Regulation · 1.6.4 Wages in Imperfect Labour Markets
Extract F (lines 1–3) states: ‘There are aspects of market failure in the social care sector, though some argue that inappropriate government intervention and a lack of funding are the main reasons why the system is failing to deliver high quality care.’ Using the extracts and your knowledge of economics, assess policies that might be used to improve the provision of social care in the UK.
1.8.2 The Meaning of Market Failure · 1.8.9 Government Intervention
Explain how the imposition of a tax on a good or service affects both consumer surplus and producer surplus.
1.5.11 Consumer and Producer Surplus
Discuss whether governments should consider increasing the regulation and taxation of technology firms which have acquired significant global monopoly power.
1.5.6 Monopoly and Monopoly Power · 1.8.7 Competition Policy
Explain how a production possibility diagram can be used to illustrate some features of the fundamental economic problem.
1.1.5 Production Possibility Diagrams · 1.1.4 Scarcity, Choice and Opportunity Cost
Evaluate the view that government intervention to reduce inequality will lead to an improvement in economic welfare.
Explain why imperfect information can lead to market failure.
1.2.2 Imperfect Information · 1.8.6 Market Imperfections
Assess the view that price discrimination is always damaging.
1.5.7 Price Discrimination
Using the data in Extract A (Figure 1), calculate the percentage change in the price of construction sand between January 2014 and January 2018. Give your answer correct to one decimal place.
Explain how the data in Extract A (Figures 1 and 2) show that expansion in the global sand market is leading to prices of construction sand rising in real terms.
Extract B (line 18) states that the global trade in sand has been ‘made possible by cheaper transportation’. With the help of a diagram, explain how cheaper transportation and a construction boom in East Asia have led to growth in the market for sand.
1.3.1 Determinants of Demand · 1.3.5 Equilibrium Market Prices
Extract C (lines 14–15) states that ‘Rising prices will eventually also force builders in developing countries to explore alternatives to sand.’ Use the extracts and your knowledge of economics to assess the view that the increasing scarcity of sand is a problem best solved by market forces, rather than through government intervention.
1.1.4 Scarcity, Choice and Opportunity Cost · 1.8.1 The Price Mechanism
Using the data in Extract D (Figure 3), calculate the amount of government funding per £ of passenger income in the UK rail industry for the year 2015–16. Give your answer correct to the nearest penny.
Explain how the data in Extract D (Figure 4) show that in the UK, between 2004 and 2017, changes in the demand for rail travel contributed to changes in the price of rail travel.
Extract E (lines 10–11) describes the British railway sector as a ‘natural monopoly’, which was split up into ‘no less than 100 pieces’ when it was privatised. With the help of a diagram, explain why breaking up a natural monopoly in rail may affect long-run average costs.
Extract F (lines 9–10) suggests that ‘the British public really don't care about who runs the trains; what they care about is reliability, comfort and price.’ Use the extracts and your knowledge of economics to evaluate the case for renationalising railways in the UK.
Explain how rules of thumb and irrationality can affect consumers’ demand for goods and services.
1.2.3 Behavioural Economic Theory
Using examples to illustrate your answer, assess the usefulness of behavioural economic theory compared to traditional economic policies in helping governments to correct market failures
1.2.4 Behavioural Economics and Policy · 1.2.1 Consumer Behaviour
Explain the factors a profit-maximising firm will take into account when deciding whether to shut down or to carry on operating, both in the short run and in the long run.
1.4.4 Costs of Production · 1.4.7 Profit
Discuss the validity of the traditional economic assumption that the main objective of firms is to maximise profits.
1.5.2 The Objectives of Firms
Explain how the impact of a minimum price for a good or service is affected by its price elasticity of demand and its price elasticity of supply.
1.8.9 Government Intervention · 1.3.2 Elasticities of Demand
Discuss the view that a national minimum wage is beneficial for an economy.
1.6.6 The National Minimum Wage
To what extent, if at all, do the data suggest that houses in the UK were more affordable in 2017 than they were in 2007? You must use the data in Extract C to support your assessment.
Explain the likely causes of the main changes in house prices that have taken place between 2007 and 2017.
1.3.5 Equilibrium Market Prices · 1.3.1 Determinants of Demand
After considering Extract E, and the original evidence in Extracts A, B, C and D, would you recommend that the Government should increase its spending on housing? Justify your recommendation.
Using Extract A, calculate the ratio of customers gained to customers lost by Nationwide. Give your answer correct to one decimal place.
1.5.1 Market Structures
Explain how the data in Extract A show that the market power of the Big Four banks is weakening against competition from smaller rivals.
1.5.6 Monopoly and Monopoly Power · 1.5.8 The Dynamics of Competition
Extract C (lines 10–11) states that ‘There is ample opportunity for new players to enter the sector.’ With the help of a diagram, explain how the lowering of barriers to entry in the banking market might lead to lower prices and a situation in which banks make normal profit.
1.5.9 Contestable Markets
Extract B (lines 4–6) states that ‘banks do not feel enough pressure to compete on price or quality, leading some to call for the Big Four to be split into a number of smaller banks.’ Use the extracts and your knowledge of economics to assess the view that the government should intervene further in the banking sector to promote greater competition.
Using Extract D, calculate the number of transportation and storage jobs at high risk of automation, as a percentage of those who are at high risk across all industries. Give your answer to two decimal places.
Explain how the data in Extract D show that workers employed in routine, repetitive work are at greater risk from automation.
1.4.8 Technological Change · 1.6.1 The Demand for Labour
Extract E (lines 4–5) claims that workers in the 18th century saw wages rise in line with productivity. With the help of a diagram, explain how advances in modern technology are likely to lead to rising wages in some industries.
1.6.3 Wages in Competitive Labour Markets · 1.4.1 Production and Productivity
Extract E (lines 14–16) states that ‘The market economy is not going to create the jobs by itself for those workers who are most affected by the change.’ Extract F (lines 4–5) states that ‘taxing productivity-enhancing tools like robots or machines makes no economic sense.’ Use the extracts and your own knowledge of economics to evaluate whether governments should allow markets to respond freely to the opportunities and challenges presented by technological progress, without any state intervention.
Explain why the use of petrol and diesel cars may be a source of market failure.
Assess the view that regulation is a better policy for dealing with the problem of air pollution than the allocation of property rights or taxation.
Explain how the Lorenz curve and Gini coefficient may be used to illustrate increasing income inequality in a country.
Assess the view that, in the UK, the consequences of wealth inequality are more damaging than the consequences of income inequality.
Explain the role of profit in a market economy.
Evaluate the view that a firm making low profits must be inefficiently managed.
To what extent, if at all, do the data suggest that the reliance on fossil fuels to produce energy is falling? You must use the data in Extract C to support your assessment.
After considering Extract E, and the original evidence in Extracts A, B, C and D, would you recommend to the members of OPEC that they continue to restrict the supply of oil to try to raise the world market price of oil? Justify your recommendation.
Using the data in Extract A (Figure 1), calculate the three-firm concentration ratio in the UK parcels delivery market. Give your answer, as a percentage, to one decimal place.
Explain how the data in Extract A (Figure 2) show that the UK parcels delivery market is displaying dynamic efficiency.
Extract B (lines 12–14) states that ‘The Universal Postal Service obligations require Royal Mail to deliver letters and parcels to all parts of the country six days a week’. With the help of a monopoly diagram, explain how the Universal Postal Service obligations are likely to affect Royal Mail’s costs and profits.
Extract C (line 2) states that ‘Many competitors are using digital technology to drive innovation’. Use the extracts and your knowledge of economics to assess whether the benefits outweigh the costs when the Government privatises organisations such as Royal Mail and opens up the market to competition.
1.4.8 Technological Change · 1.5.8 The Dynamics of Competition
Using the data in Extract D (Figure 3), calculate the mean female labour force participation rate for the five countries listed. Give your answer to one decimal place.
Explain how the data in Extract D (Figure 4) show that the degree of inequality between the pay of male and female workers is falling.
Extract E (lines 22–23) states that ‘The tendency for women to participate in low-productivity sectors is now a bigger factor in their low pay than discrimination’. With the help of a diagram, explain how the difference between the marginal revenue product of male and female workers might account for the lower average earnings of women.
1.6.7 Labour Market Discrimination · 1.4.1 Production and Productivity
Extract F (lines 19–20) notes that ‘The UK Government recognises the need to raise aspirations and attainment for girls’. Use the extracts and your knowledge of economics to evaluate the policies that government might use to reduce the gender pay gap.
1.6.7 Labour Market Discrimination · 1.6.2 The Supply of Labour
Explain how price and output are determined for a firm in a monopolistically competitive market, in both the short run and the long run.
1.5.4 Monopolistic Competition
Evaluate the view that government regulation of monopolistically competitive markets is unnecessary, and that polices to encourage competition and prevent the abuse of monopoly power should focus entirely on oligopolies and monopolies.
1.5.4 Monopolistic Competition · 1.8.7 Competition Policy
Explain the main causes of poverty in the UK.
To what extent can the problem of poverty in the UK be solved through the operation of market forces? Justify your answer.
1.7.2 The Problem of Poverty · 1.7.3 Policies on Poverty and Inequality
Explain why, in a free market, sugary drinks may be overconsumed.
1.8.5 Merit and Demerit Goods · 1.8.4 Externalities
Evaluate the view that imposing a tax is the most effective government policy for reducing the market failures arising from overconsumption of unhealthy food and drink.
1.8.9 Government Intervention · 1.8.5 Merit and Demerit Goods
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