AS & A Level Economics (9708) — October–November 2024, Paper 32

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 maximisation (equi-marginal principle)

If consumers aim to maximise their utility, how will they arrange their spending? A to obtain the same total utility from each commodity B to obtain the same total utility per $…

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

Which feature of indifference curve theory is most likely to apply in reality? A The consumer can express preferences between all possible combinations of goods. B The consumer…

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Question 3 · 1 mark · The price system and the microeconomy - returns to scale and long-run average cost

Diagrams 1 and 2 show different long-run average cost curves (LRAC). [Diagram 1: vertical axis labelled 'cost', horizontal axis labelled 'output', origin O. A single curve…

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Question 4 · 1 mark · Government microeconomic intervention - positive externality of consumption

A government makes it compulsory for motorbike riders to wear helmets. What would represent a positive externality of consumption associated with this decision? A decreased…

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Question 5 · 1 mark · The price system and the microeconomy - concentration ratio and market structure

The table shows the market shares of firms selling a very similar product in a country between 2018 and 2020. firm 2018 2020 --- --- --- Norton 28.4 27.4 Souton 18.9 17.6 Eastern…

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Question 6 · 1 mark · The price system and the microeconomy - monopoly and the effect of a change in fixed costs

The diagram shows a profit maximising firm in equilibrium. [Diagram: vertical axis labelled '$', horizontal axis labelled 'quantity', origin O. A downward-sloping straight line…

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Question 7 · 1 mark · The price system and the microeconomy - price discrimination

A bus company has a monopoly and specialises in long-distance travel. It initially sells its tickets to customers one month in advance of the journey. As the departure date…

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Question 8 · 1 mark · Government microeconomic intervention - externalities and allocative efficiency

The diagram shows the marginal private benefit (MPB), the marginal private cost (MPC) and the marginal social cost (MSC) for firms in an industry. The equilibrium price is point…

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Question 9 · 1 mark · The price system and the microeconomy - oligopoly and game theory (prisoner’s dilemma)

Firm X is considering whether to co-operate with its rival so that their joint profit is $4000 a month ($2000 each). It calculated that, if it did not co-operate, its own profit…

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Question 10 · 1 mark · The price system and the microeconomy - growth of firms and integration

A smartphone manufacturing company takes over an electronic chip design company. This is an example of which type of growth? A horizontal B lateral C vertical backwards D vertical…

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Question 11 · 1 mark · Government microeconomic intervention - subsidies and market failure

What is not a valid comment economists may make regarding the need to subsidise a green energy market that uses solar and wind power? A It is cheaper to use the plentiful supply…

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Question 12 · 1 mark · The price system and the microeconomy - minimum wage in a monopsony labour market

In which situation is the introduction of a minimum wage most likely to raise employment opportunities as well as wages? A Firms face intense competition both at home and abroad.…

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Question 13 · 1 mark · The price system and the microeconomy - the demand for labour (marginal revenue product)

The diagram shows a firm’s initial marginal revenue product of labour curve (MRP₁). [Diagram: vertical axis labelled 'marginal revenue product of labour', horizontal axis labelled…

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Question 14 · 1 mark · The price system and the microeconomy - the demand for labour and profit-maximising employment

A firm operates in a perfectly competitive labour market. The table shows the marginal revenue product (MRP) and marginal cost of labour (MCL) for each additional worker employed…

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Question 15 · 1 mark · Government macroeconomic intervention - policies to redistribute income and wealth

Countries in South East Asia have some of the highest income inequality in the world. Which policy could be adopted by governments in South East Asia to reduce income inequality…

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Question 16 · 1 mark · Money and banking - the functions of money

When buying a car, Salma agrees to pay half of the cost now and the other half in six months time. Which function of money does this illustrate? A divisibility B durability C…

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Question 17 · 1 mark · The macroeconomy - unemployment and the natural rate of unemployment

When is the natural rate of unemployment most likely to fall? A when there is a decline in the education levels of workers B when there is an increase in income tax rates C when…

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Question 18 · 1 mark · The macroeconomy - economic growth and efficiency

A country has increasing productivity and falling unemployment. What can be concluded from this information? A Economic efficiency has increased. B Interest rates have increased.…

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Question 19 · 1 mark · The macroeconomy - the Keynesian 45-degree model and the deflationary gap

The diagram shows full employment, national income, and expenditure (AMD). The economy is in equilibrium at J. [Diagram: vertical axis labelled AMD, horizontal axis labelled…

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Question 20 · 1 mark · Government macroeconomic intervention - fiscal policy and automatic stabilisers

A country experiences an increase in unemployment due to deficiency of aggregate demand. What will be the effect of this on tax revenue and government expenditure, assuming that…

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Question 21 · 1 mark · Government macroeconomic intervention - macroeconomic policy objectives and conflicts

A government is successful in raising the rate of economic growth. As a result, which other macro-economic aim would it most likely have achieved in the short run? A balance of…

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Question 22 · 1 mark · Government macroeconomic intervention - fiscal policy and taxation

Which argument for lowering income tax rates is always valid? A It boosts economic activity. B It promotes the incentive to work. C It reduces the budget deficit. D It reduces the…

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Question 23 · 1 mark · The macroeconomy - the Phillips curve

The table shows the percentage of labour force unemployed and the rate of inflation in a country over a five-year period. year unemployment % inflation % --- --- --- 1 3.5 4.0 2…

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Question 24 · 1 mark · The macroeconomy - measuring income distribution (Gini coefficient)

What indicates that a more equal distribution of income has been achieved? A a faster rate of economic growth B a higher Human Development Index C a lower Gini coefficient D a…

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Question 25 · 1 mark · International economic issues - balance of payments policies (expenditure-switching)

In 2018, the United States (US) government introduced tariffs on a wide range of imports from China. Which type of policy was the US government adopting? A expenditure-reducing B…

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Question 26 · 1 mark · International economic issues - the balance of payments (current account)

A US company receives a US$20 million dividend from shares that it owns in a Brazilian company. How would this dividend be shown in the balance of payments of the United States? A…

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Question 27 · 1 mark · International economic issues - exchange rate terminology

An increase or decrease in exchange rates can take place in both a floating and a fixed exchange rate system but different terminology is used for each system. What is the correct…

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Question 28 · 1 mark · International economic issues - foreign direct investment and the current account

Company X is a multinational company that produces batteries for electric cars. It decides to invest in a new factory in country N. Under which conditions is this investment most…

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

The diagram shows two Lorenz curves. [Diagram: a square with the vertical axis labelled 'percentage of income' (0 to 100) and the horizontal axis labelled 'percentage of…

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Question 30 · 1 mark · International economic issues - globalisation

What is a likely result of globalisation? A Absolute advantage replaces comparative advantage as the basis for trade. B Firms’ supply chains are shortened. C Trade is less likely…

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