Diagrams A-Level Economics Diagrams All Diagrams for Year 12 Microeconomics Production Possibility diagram Outward Shift in Production Possibility diagram Free Market Equilibrium diagram for A-Level Economics Increase in Demand diagram for A-Level Economics Decrease in Demand diagram for A-Level Economics Increase in Supply diagram for A-Level Economics Decrease in Supply
Model Paragraphs Maximum Price | A-Level Economics Model Paragraph Maximum prices One way to correct the market failure in the market for rented housing is through maximum prices. A maximum price is a price above which it is illegal to sell, and a maximum price should be set below the free-market equilibrium to have any effect on the
Model Paragraphs Minimum Price | A-Level Economics Model Paragraph Minimum prices One way to correct the market failure in the market for alcohol is through minimum prices. A minimum price is a price below which it is illegal to sell, and a minimum price should be set above the free-market equilibrium to have any effect on the market.
Model Paragraphs Provision of information | A-Level Economics Model Paragraph Provision of information One way the government could intervene in the market for cycling is through provision of information. The market for cycling has positive externalities in consumption, as cyclists under-value the full benefit of their choice, both to their own health and to wider society through reduced traffic
Model Paragraphs Complete Market Failure | A-Level Economics Model Paragraph Complete market failure Complete market failure occurs when the free market fails to provide a good entirely, resulting in a missing market. This happens in the case of public goods, which are goods that are both non-rival and non-excludable. These characteristics cause the free-rider problem to occur.
Model Paragraphs Externalities | A-Level Economics Model Paragraph Types of externality Positive externality in consumption Negative externality in consumption Positive externality in production Negative externality in production Positive externalities in consumption are when there is a positive impact on a third party from a transaction. The third party refers to anybody apart from the buyer or the seller.
AQA 9 mark question Explain how an appreciation of the krone could help Norway reduce inflation AQA A-Level Economics Paper 2 June 2025 Extract B (lines 6–7) states: ‘Some analysts hope that, before long, the currency will start to appreciate which could help Norway reduce inflation.’ With the help of a suitable diagram, explain how an appreciation of the krone could help Norway reduce
AQA 9 mark question Explain why a higher rate of economic growth is likely to reduce the budget deficit AQA A-Level Economics Paper 2 June 2019 Extract E (lines 11–12) states ‘If growth could be increased, the budget deficit would fall much faster.’ With the help of a diagram, explain why a higher rate of economic growth is likely to reduce the budget deficit. (9 marks) 1.
AQA 9 mark question Explain how an increase in injections may generate multiple increases in an economy’s GDP AQA A-Level Economics Paper 2 June 2019 Extract B (lines 8–9) states ‘If injections into an economy’s circular flow of income increase, then this may generate multiple increases in GDP.’ With the help of a diagram, explain how an increase in injections may generate multiple increases in
AQA 9 mark question Explain how a floating exchange rate may help to correct a trade surplus AQA A-Level Economics Paper 2 June 2018 Extract C (lines 8–9) states ‘Trade deficits and surpluses may be selfcorrecting in a floating exchange rate system.’ With the help of a diagram showing the supply of and demand for a currency, explain how a floating exchange rate may help
AQA 9 mark question Explain how a reduction in tariffs could help to reduce inflation AQA A-Level Economics Paper 2 June 2022 Extract E (lines 7–9) states: ‘It was hoped that policy measures, including a reduction in tariffs... would help to reduce inflation’. With the help of a diagram, explain how a reduction in tariffs could help to reduce inflation. (9 marks) 1.
AQA 9 mark question Explain how a reduction in government spending could increase unemployment in the private sector AQA A-Level Economics Paper 2 June 2021 Extract B (line 9) states: ‘The government spending cuts also severely damaged private-sector jobs.’ With the help of a diagram, explain how a reduction in government spending could increase unemployment in the private sector. (9 marks) 1. Unemployment is the number
AQA 9 mark question Explain how investment in research and development (R&D) can help to increase the long-run growth rate of an economy AQA A-Level Economics Paper 2 June 2021 Extract E (line 14) states: ‘Investment in R&D has been an important driver of economic growth and industrial progress.’ With the help of a diagram, explain how investment in research and development (R&D) can help to increase the
AQA 9 mark question Explain how a depreciation of the pound may cause inflation AQA A-Level Economics Paper 2 June 2024 Extract C (lines 4–5) states ‘Energy and food bills had risen dramatically due to shocks to the economy, such as labour shortages, a depreciation of the pound…’ With the help of a diagram, explain how a depreciation of the pound may
AQA 9 mark question Explain how high economic growth could help to create a budget surplus AQA A-Level Economics Paper 2 June 2023 Extract C (line 13) states: ‘High economic growth rates allowed Ireland to run a budget surplus in 2018 and 2019.’ With the help of a diagram, explain how high economic growth could help to create a budget surplus. (9 marks) 1. Economic
AQA 9 mark question Explain how a low rate of corporation tax may cause short-run and long-run economic growth AQA A-Level Economics Paper 2 June 2024 Extract E (lines 17–18) states: ‘A low rate of corporation tax has also contributed to both short-run and long-run economic growth.’ With the help of a diagram, explain how a low rate of corporation tax may cause short-run
AQA 9 mark question Explain why a trade-off between price stability and low unemployment might occur AQA A-Level Economics Paper 2 June 2018 Extract E (lines 16–17) states ‘However, some argue that trying to maintain stable prices and low unemployment could create trade-offs.’ With the help of a diagram, explain why a trade-off between price stability and low unemployment might occur. 1.
Model Paragraphs Policies to Increase Economic Growth | A-Level Economics Model Paragraph Expansionary fiscal policy Expansionary fiscal policy can be used to promote economic growth. This is when the government increases spending or decreases taxes in order to influence the level of aggregate demand in the economy. One example could be the government reducing income taxes. This allows consumers to keep more
Edexcel 10 mark question Assess whether Netflix subscribers behave rationally Edexcel A-Level Economics Paper 1 June 2023 Extract With reference to the information provided, assess whether Netflix subscribers behave rationally. (10 marks) 1. It is possible that Netflix customers act irrationally, which means that they don't always maximise their utility as traditional economic theory suggests. 2. In
Edexcel 10 mark question Assess the extent to which ‘information gaps’ and ‘irrational behaviour’ are the main causes of food waste in the UK. Edexcel A-Level Economics Paper 1 June 2017 Extract Assess the extent to which ‘information gaps’ (Extract B, lines 5 and 6) and ‘irrational behaviour’ (Extract B, line 11) are the main causes of food waste in the UK. (10 marks) 1. Information gaps exist as a result of both
Edexcel 10 mark question Assess the limitations of using GDP to compare living standards over time Edexcel AS-Level Economics Paper 2 June 2022 Extract With reference to the fourth paragraph of Extract A, assess the limitations of using GDP to compare living standards over time. (10 marks) 1. GDP might not be the best way to compare living standards over time as it fails to
Edexcel 10 mark question Profit maximisation is assumed to be the business objective of most firms. Assess whether this is the case for coffee shop owners. Edexcel A-Level Economics Paper 1 June 2022 Extract Profit maximisation is assumed to be the business objective of most firms. With reference to Extract A, assess whether this is the case for coffee shop owners. (10 marks) 1. Profit maximisation occurs when firms produce at the output where marginal
Edexcel 10 mark question Assess how the regulation of energy suppliers’ profits is likely to affect consumers and suppliers in the energy market Edexcel A-Level Economics Paper 1 June 2018 Extract With reference to Extract B, assess how the regulation of energy suppliers’ profits is likely to affect consumers and suppliers in the energy market. (10 marks) 1. A profit cap is likely to increase consumer surplus. 2. A profit cap limits
Edexcel 10 mark question Assess possible reasons why many ‘landline-only’ customers do not switch to a cheaper telephone provider Edexcel A-Level Economics Paper 1 June 2019 Extract With reference to Extract C, assess possible reasons why many ‘landline-only’ customers do not switch to a cheaper telephone provider. (10 marks) 1. One reason customers might not switch to a cheaper provider is due to irrational behaviour. 2. Switching
Edexcel 10 mark question Assess whether complete nationalisation of the rail industry might protect employees Edexcel A-Level Economics Paper 1 June 2020 Extract Assess whether complete nationalisation of the rail industry might protect employees. (10 marks) 1. Nationalisation of the rail industry is likely to protect employees. 2. Nationalisation refers to the government taking ownership of firms in the rail industry. 3. Private firms