Jaisul Naik

Model Paragraphs

Explain the functions of the price mechanism

Increase in demand Decrease in demand Decrease in supply Increase in supply The diagram below shows how the free market responds to an increase in demand. This is due to the invisible hand of the market (the functions of the price mechanism). Initally, the market is at equilibrium with a

Model Paragraphs

Explain the causes of a price change

Factors affecting demand (PIRATES) Population Income Related goods Advertising Trends Expectations Seasons One cause of a price change is a change in population. When the population increases, this would lead to an increase in the demand for milk, as consumers would be willing and able to buy more milk at

Model Paragraphs

Evaluate Whether the Government Should Intervene in a Market

Free market: efficient allocation Free market: inequitable outcomes Intervention: correcting market failure Intervention: risk of government failure One advantage of providing services like bus travel through the free market is that scarce resources are allocated efficiently due to the functions of the price mechanism. This was the argument of Adam

Model Paragraphs

Discuss the best government interventions to correct positive externalities

Maximum prices Subsidies Provision of information State provision A-Level Economics Model Paragraph — Analysis 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

Model Paragraphs

Discuss the best government interventions to correct negative externalities

Minimum prices Indirect taxes Pollution permits Provision of information (Consumption) Provision of information (Production) A-Level Economics Model Paragraph — Analysis 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

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