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Actual 2024 AQA AS ECONOMICS 7135/1 Paper 1 Merged Question Paper + Mark Scheme + Insert AQA Please write clearly in block capitals. Centre number Candidate number Surname Forename(s) Candidate signature | declare this is my own work. AS ECONOMICS Paper 1 The Operation of Markets and Market Failure Monday 13 May 2024 Morning Time allowed: 1 hour 30 minutes Materials ; For this paper you must have: foramina sles ¢ the Insert Section Mark « a calculator. A B Instructions Use black ink or black ball-point pen. Pencil should only be used for drawing. TOTAL Fill in the boxes at the top of this page. Answer all questions in Section A. Answer either Context 1 or Context 2 in Section B. You will need to refer to the Insert provided to answer Section B. You must answer the questions in the spaces provided. Do not write outside the box around each page or on blank pages. ¢ If you need extra space for your answer(s), use the lined pages at the end of this book. Write the question number against your answer(s). ¢ Do all rough work in this book. Cross through any work you do not want to be marked. Information e The maximum mark for this paper is 70. « The marks for questions are shown in brackets. e No deductions will be made for wrong answers. i000 7135/1 IB/G/Jun24/G4002/E11 Do not write + outside the Section A box Answer all questions in this section. Only one answer per question is allowed. For each question completely fill in the circle alongside the appropriate answer. CORRECT METHOD le) WRONG METHODS [w lola! d| If you want to change your answer you must cross out your original answer as shown. De If you wish to return to an answer previously crossed out, ring the answer you now wish to select as shown. Which one of the following is a function of prices in a market economy? [1 mark] A Allocating resources to the production of public goods B Ensuring that the distribution of goods and services is fair C Incentivising firms to produce the goods consumers want [a] fo) {0} [ol D Providing a measurement of positive and negative externalities Which one of the following is a normative statement? The price of petrol [1 mark] A fell in real terms last year. B is affected by supply. C is now too high. [o] Lo} [0] [0] D will rise next year. 02 IB/M/Jun24/7135/1 2 Do not write outside the The price of carrots falls from 60p to 54p per kilo. As a result of this fall in price, the box quantity supplied falls by a quarter. What is the price elasticity of supply? [1 mark] A 0.25 [=] B04 [=] c 25 [=] D4 e In a perfectly competitive market, a firm is most likely to [1 mark] A charge the same price as other firms. B earn large profits in the long run. [=] [=] [=] C produce the same output as its competitors. D spend large amounts of money on advertising. 04 IB/M/Jun24//7135/1 4 Do not write outside the A firm aims to make as much profit as possible. box This means the firm should aim to [1 mark] A maximise the difference between its total revenue and total cost. [e] B maximise the total revenue it receives from selling its output. [e] C minimise the average total cost of each unit it produces. [es] D minimise the total cost of producing its output. [e] The market for barley is no longer in equilibrium due to an increase in demand for barley. This is most likely to lead to [1 mark] A a fall in the price of barley and a leftward shift of the supply curve. [e] B a fall in the price of barley and a movement along the supply curve to the left. [e] C arise in the price of barley and a movement along the supply curve to the right. fe] D arise in the price of barley and a rightward shift of the supply curve. le] Turn over for the next question Turn over > 05 IB/M/Jun24/7135/1 5 Do not write [1] 4] An inequitable distribution of income may result in market failure because toe [1 mark] A government action to reduce inequality may lead to government failure. [eo] B it affects an individual's ability to consume goods and services. [es] C it provides the incentive for people to work hard. [=] D the government will not be able to provide as many merit goods. [=] [1[2] Kim has £100 to spend and is considering three options. She would rather spend the money on clothes than shoes but believes she would gain most benefit from spending £100 on an evening out. Assuming that she spends the money to gain the most benefit, what is the opportunity cost of her decision? [1 mark] A The clothes B The clothes and the shoes C The evening out [o] fo] {a} [ol D The shoes Turn over for the next question Turn over > 07 IB/M/Jun24/7135/1 7 [1] 3] Table 1 shows the private benefit, private cost, social benefit and social cost of four different redevelopment projects. Table 1 Grants to new Marketing New bus ae . . . Pedestrianisation retailers campaign station Private benefit £5m £3m £2m £4m Private cost £15m £4m £20m £12m Social benefit £10m £5m £50m £30m Social cost £15m £4m £30m £14m A local authority has a maximum of £15 million to spend on the redevelopment. Which one of the projects in Table 1 should the local authority choose to maximise social welfare, given the limited funding available? A Grants to new retailers B Marketing campaign C New bus station D Pedestrianisation 08 [o] fo) [a] [ol [1 mark] IB/M/Jun24//7135/1 Do not write outside the box 10 Do not write outside the A firm sets up in an area where a local college provides training courses for the workers in box that industry. This shows the firm taking advantage of [1 mark] A external economies of scale. B internal economies of scale. C the provision of a public good. D the provision of perfect information. [a] o) [ol [ol [1|7| Table 2 shows an index of labour productivity per hour for a large car manufacturer. Table 2 Year Index of labour productivity per hour 2017 978 2018 98.6 2019 100.0 2020 89.5 2021 95.4 Which one of the following statements must be true? [1 mark] A Output per hour of labour was higher in 2017 than in 2021 B Production of cars was higher in 2019 than in 2018 C The firm was operating at full capacity in 2019 [o] fo) [ol [ol D There were fewer workers employed in 2020 than in 2018 10 IB/MiJun24//7135/1 10 11 Do not write outside the Derived demand is when box [1 mark] A a good is used for a variety of different purposes. B the demand for a good depends on the sales of what it produces. C the willingness to buy the good is backed by the ability to pay. [4] fo) [4] [ol D two goods have a positive cross elasticity of demand. Figure 3 shows a firm’s demand curve (D). Figure 3 Price £5 £3 D Quantity If the firm raises its price from £3 to £5, demand is [1 mark] A price elastic and total revenue will fall. B price elastic and total revenue will rise. C price inelastic and total revenue will fall. fo] fo) a) [ol D price inelastic and total revenue will rise. Turn over > 11 IB/MiJun24/7135/1 11 13 Do not write . outside the Section B box Look at the Insert and choose to answer EITHER Context 1 OR Context 2. Answer EITHER Questions 21 to 26 in the spaces below. OR Questions 27 to 32 on pages 24 to 33 of this answer booklet. There is a total of 50 marks for either context. Shade the circle below to indicate which context you have answered. Context [0[1 [© | (Context fo[2|—] CORRECT METHOD [eo] WRONG METHOD EITHER Context 1 Total for this context: 50 marks TOURISM IN THE UK Use the Insert provided to study Questions 21 to 26 and Extracts A, B and C, and then answer the questions in the spaces which follow. {2[4] Define ‘scarce resource’ Extract B (line 11). [3 marks] Turn over > Win ee 14 Do not write outside the [2[2] Extract C (lines 4—7) states: ‘Since 2011, tourists staying in a five-star hotel in the peak box season have been taxed €5 for each night. However, they are only charged for five nights, even if they stay longer. They pay 50% less in the off-peak season.’ Calculate the total amount of tax paid by two people staying for seven nights in a five-star hotel in the off-peak season. [4 marks] 1 IB/MiJun24//7135/1 14 16 Do not write outside the A local authority has limited resources to allocate to two services, ‘cleaning beaches’ and Bo ‘other local government services’. Draw a production possibility diagram showing the potential provision of these two services. Assuming these resources remain fully employed, show on this diagram the effect of allocating more resources to cleaning beaches. [4 marks] INIA IB/MiJun24//7135/1 16 17 Do not write outside the [2[5] Extract B (lines 1-2) states: ‘As the world recovered from the recession of 2008, there nal was more demand for travel and tourism.’ Explain possible reasons for an increase in the demand for travel and tourism. [10 marks] Turn over > 17 IB/M/Jun24/7135/1 17 19 Do not write Extract C (lines 13-14) states: ‘In recent years, with more people holidaying in the UK, outside the some tourist sites have been overwhelmed by visitors.’ box Use the extracts and your knowledge of economics to discuss whether there should be more state intervention to limit tourism in the UK. [25 marks] Turn over > 19 IB/M/Jun24/7135/1 19 20 Do not write outside the box 20 IB/MiJun24//7135/1 20 
