Economics A Level Paper 1 Quiz February/March 2021

An American family is choosing between four holiday destinations in Europe, each at the same price. The table shows the family’s order of preference for these holiday destinations.

holiday destination - order of preference

Barcelona 1st

London = 3rd

Paris 2nd

Venice = 3rd

If the family goes to Barcelona, what is the opportunity cost of this choice?

• Barcelona

• London and Venice

• Paris

• London, Paris and Venice

The diagram shows two production possibility curves for an economy. Which combination of movements correctly illustrates these changes in production?

• A

• B

• C

• D

What distinguishes the very long run from the long run?

• the ability to change resource allocation

• the ability to change the state of technology

• the absence of government market intervention

• the existence of variable factors of production

Which statement is a positive statement?

• The distribution of income and wealth in most western European countries is unequal.

• The government ought to increase income tax on high earners.

• There should be more legal rights given to workers to protect their status in the workplace.

• Wages of those on low incomes should be increased.

What could not cause a shift in an individual’s demand curve for good Z?

• a change in advertising expenditure on Z

• a change in the individual’s income

• a change in the individual’s tastes

• a change in the price of Z

The diagram shows the market for sugar which is initially in equilibrium at a price of OP. A government then fixes a maximum price of OP1. What will happen as a result?

• a reduction in farmers’ revenue equal to PRSP1

• expenditure on sugar will be equal to PRMO

• farmers’ revenue would be P1UNO

• producer surplus will be P1SP2

The table shows a competitive market in equilibrium in two periods. What could explain the change from period 1 to period 2?

• an increase in the price of a complement

• an increase in the price of a substitute

• the imposition of a minimum price of 60 cents by a government

• the imposition of an indirect tax on suppliers

Which example of consumer behaviour would create consumer surplus?

• when a consumer does not spend all of her income each month

• when a consumer pays less than they are willing to pay for a good

• when a consumer throws away vegetables because they bought too much

• when a good is purchased in order to resell it at a higher price

A manufacturer reduces the price of its goods after developing a more efficient manufacturing process. It makes leather belts that compete against belts made of artificial material. What are the likely outcomes of the change in the manufacturing process?

• A

• B

• C

• D

What is the likely price elasticity of supply of highly perishable goods and goods that have low stocks?

• A

• B

• C

• D