AS & A Level Economics (9708) — October–November 2023, Paper 31

30 questions · every question answerable online with instant point-by-point AI marking against the official mark scheme.

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Question 1 · 1 mark · The price system and the microeconomy - utility and diminishing marginal utility

Economists normally assume that the marginal utility from consuming additional goods is positive and diminishing. What is the effect on total satisfaction of consuming extra units…

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Question 2 · 1 mark · The price system and the microeconomy - budget lines

A budget line (b–b) shows the combinations of two goods, X and Y, that a consumer can obtain within a fixed income of $60 per week, when the price of Y = $1 and X = $2. [Diagram:…

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Question 3 · 1 mark · The price system and the microeconomy - contestable markets

Which market structures are contestable? perfect competition monopolistic competition pure monopoly --- --- --- --- A no no yes B no yes yes C yes no no D yes yes no A combination…

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Question 4 · 1 mark · The price system and the microeconomy - costs of production (short run and long run)

The diagram shows a long-run average cost curve (LRAC), and three short-run average cost curves (SRAC₁, SRAC₂ and SRAC₃) for an individual firm. Each short-run average cost curve…

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Question 5 · 1 mark · The price system and the microeconomy - oligopoly and the kinked demand curve

Which combination of reactions by rivals results in a kinked demand curve for an oligopolist when a price is changed? A copying both a price rise and a price fall B copying a…

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Question 6 · 1 mark · The price system and the microeconomy - price discrimination

What is a key condition for effective price discrimination? A The product cannot be resold to another consumer. B The product must be price inelastic. C The profits from one…

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Question 7 · 1 mark · The price system and the microeconomy - barriers to entry

Which combination of cost conditions is most likely to act as a barrier to entry to a new firm wanting to join an industry? fixed costs as a proportion of total costs minimum…

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Question 8 · 1 mark · The price system and the microeconomy - efficiency (dynamic efficiency)

How is dynamic efficiency represented on a diagram? A a downward move to the minimum point of a long-run average cost curve B a downward shift in the long-run average cost curve C…

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Question 9 · 1 mark · Government microeconomic intervention - cost–benefit analysis

A city council is considering building a passenger terminal at its port so that the city can benefit from large cruise ships that could then dock there. It undertakes a…

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Question 10 · 1 mark · The price system and the microeconomy - externalities (private, external and social costs)

Some multinational oil companies extracting oil in developing countries are now required to repair the damage they do to the environment. What best describes the total costs…

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Question 11 · 1 mark · Government microeconomic intervention - government failure

Which statement is not an example of government failure? A government intervention leading to a less efficient allocation of resources B government intervention leading to a net…

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Question 12 · 1 mark · Government microeconomic intervention - minimum wages and economic rent

The diagram shows the demand for and supply of labour. [Diagram: the vertical axis is wage and the horizontal axis is quantity of labour. The supply of labour curve SL slopes…

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Question 13 · 1 mark · The price system and the microeconomy - labour markets and mobility

A firm is faced with a shortage of labour. It decides to introduce its own training scheme for school leavers. Which effect is this most likely to have on the firm? A a decrease…

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Question 14 · 1 mark · Government macroeconomic intervention - taxation (regressive taxes)

What is likely to result if a government introduces a new regressive tax? A Aggregate demand will increase. B Employment opportunities will increase. C Income equality will…

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Question 15 · 1 mark · Government macroeconomic intervention - policies to reduce income inequality

Which government policy to counter the effects of income inequality is correctly matched with one of its advantages and one of its disadvantages? policy advantage of policy…

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Question 16 · 1 mark · Government microeconomic intervention - subsidies and externalities

Under which circumstances will a subsidy from the government be most beneficial if there are externalities from producing good X? externality caused by good X price elasticity of…

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Question 17 · 1 mark · The macroeconomy - the circular flow of income (open vs closed economy)

What might decrease if a closed economy with a government sector decides to allow international trade? A components of aggregate expenditure B number of injections into the…

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Question 18 · 1 mark · The macroeconomy - the Keynesian 45-degree diagram and the deflationary gap

The diagram shows a closed economy in which the full employment level of income is YF. [Diagram: the vertical axis is labelled aggregate demand, consumption and the horizontal…

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Question 19 · 1 mark · Government intervention - environmental policy (regulatory vs market-based)

Which policy to counter climate change is considered to be regulatory rather than market based? A the introduction of carbon taxes on pollution B the operation of tradable…

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Question 20 · 1 mark · The macroeconomy - economic growth and sustainability

Which cause of economic growth is most likely to ensure that the growth is sustainable? A deregulation of industrial production that uses mineral resources and fossil fuel B…

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Question 21 · 1 mark · The macroeconomy - unemployment (types of unemployment)

In all major towns in a country, a government adopts a policy of opening centres where job vacancies are advertised. Which type of unemployment is the government aiming to reduce…

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Question 22 · 1 mark · The macroeconomy - investment and the accelerator theory

What is the basic assumption underlying the accelerator theory? A Investment depends on the level of business confidence. B Investment depends on the level of savings. C…

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Question 23 · 1 mark · Government macroeconomic intervention - macroeconomic policy outcomes

What shows the correct outcome for the policy option? policy option outcome --- --- --- A depreciation of the exchange rate encourages more exports, which also means greater…

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Question 24 · 1 mark · Government macroeconomic intervention - the Laffer curve and taxation

The Laffer curve shows expected tax revenues at different tax rates. [Diagram: the vertical axis is tax revenue and the horizontal axis is tax rate / %. An inverted-U…

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Question 25 · 1 mark · Government macroeconomic intervention - redistribution of income (means-tested benefits)

A government wishes to improve the income distribution between the richest and poorest in society. It introduces means tested benefits for workers on low incomes. To pay for this,…

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Question 26 · 1 mark · The macroeconomy - the Phillips curve

The table shows data on the unemployment and inflation rates for four countries in 2010 and 2014. country unemployment rate (% of workforce), 2010 unemployment rate (% of…

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Question 27 · 1 mark · The macroeconomy - measures of economic welfare (MEW)

Which adjustment is made to gross domestic product (GDP) to calculate a measure of economic welfare (MEW)? environmental costs and benefits the value of leisure activity the value…

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Question 28 · 1 mark · The macroeconomy - purchasing power parity (PPP)

Purchasing power parity (PPP) allows a comparison of the purchasing power in two countries. What is a definition of PPP? A the amount of the domestic currency needed to purchase a…

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Question 29 · 1 mark · The macroeconomy - income distribution, the Lorenz curve and the Gini coefficient

A Lorenz curve measures the income distribution in a country. The further the Lorenz curve is from the line of absolute equality, the greater the level of inequality. [Diagram:…

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Question 30 · 1 mark · The macroeconomy - the Kuznets curve (growth and inequality)

The turning point on the Kuznets curve for income inequality has been estimated to be in the region of US$10 500. For a country that has a GDP per capita of $8000, what is most…

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