Wrong past paper section A questions Flashcards
In August 2016 the ONS reported that the average house price in London was £489 000, whereas in the North East of England it was £127 000.
Explain one likely reason for the difference in average house prices between
London and the North East of England (2)
KN -Differences in average income or wealth
AN - Higher average income in London mean people are able to obtain larger mortgages and so pay higher prices
Research conducted for HMRC estimated the cross elasticity of demand for using
gaming machines to be 1.28 in response to changes in the price of national lottery tickets.
Explain the likely impact of the price increase of national lottery tickets on the
demand for using gaming machines (2)
KN -The demand for use of gaming machines is likely to increase
AN -1.28 cross elasticity of demand indicates they are close substitutes
Explain one likely reason for the decrease in sales of PCs (2)
KN -Fall in global real incomes
KN -Fall in price of substitutes
AN -New technology in other personal devices so becoming more powerful in their functions
AN -Fall in global incomes means that consumers are less likely to buy normal goods such as PCs
The indirect tax on fuel is increased in a market in which the price elasticity of
demand is −0.1. Which one of the following is the most likely effect on consumer
and producer surplus? (1)
A) Consumer surplus and producer surplus both decrease
B) Consumer surplus and producer surplus both increase
C) Consumer surplus decreases and producer surplus increases
D) Consumer surplus increases and producer surplus decreases
A) Consumer surplus and producer surplus both decrease
On average, in the UK, a working-age graduate earns approximately £10000 more
per year than a non-graduate.
This suggests a university degree provides a substantial (1)
A) external benefit
B) external cost
C) private benefit
D) social cost
C) Private benefit
The EU tradable pollution permits scheme is expected to become more effective by 2020, due to recent reductions in the number of tradable pollution permits.
Explain one likely effect of reducing the number of tradable pollution permits (4)
KN -How reducing permits reduce pollution (1)
APP x2 - shifts the supply of permits inwards (1) which will push up the price per permit (1)
AN - Reducing pollution/Increase in price of permits (1)
‘Bettys’ is a luxury café, first opened in Harrogate in 1919 specialising in afternoon tea service. Since then it has opened a further five branches in Yorkshire. It has no plans to increase the number of cafés. The six branches have 2 million customer a year.
A) Explain one likely reason why this business has remained small (2)
B) Explain why the previous expansion of this business could be described as ‘organic growth’ (2)
A) KN - Lack of finance for expansion (1)
AN - Cost of opening an additional café (1)
B) The business has grown naturally (1) without the need to takeover or merge (1)
