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Paper
A
• Fill^ in^ the^ boxes^ at^ the^ top^ of^ this^ page^ with^ your^ name,
• The^ total^ mark^ for^ this^ paper^ is^ 100.
• Check^ your^ answers^ if^ you^ have^ time^ at^ the^ end.
Advanced
PAPER 1: Markets and Business Behaviour
Instructions
• Use^ black^ ink^ or^ ball-point^ pen.
centre number and candidate number.
There are three sections in this question paper. Answer all questions from
Section A and Section B. Answer one question from Section C.
Answer the questions in the spaces provided
– there may be more space than you need.
Information
• The^ marks^ for^ each^ question^ are^ shown^ in^ brackets
– use this as a guide as to how much time to spend on each question.
Calculators may be used.
Advice
• Read^ each^ question carefully^ before^ you start^ to^ answer^ it.
EDEXCEL A LEVEL ECONOMICS A (9EC0/0 1 ) QUESTION PAPER 1 AND
MARK SCHEME SUMMER 2025
SECTION A Answer ALL questions. Write your answers in the spaces provided. Some questions must be answered with a cross in a box. If you change your mind about an answer, put a line through the box and then mark your new answer with a cross. You are advised to spend 30 minutes on this section. Use the data to support your answers where relevant. You may annotate and include diagrams in your answers. 1 The diagram below shows the cost and revenue curves for a pizza in a popular high street restaurant. The restaurant currently pursues an objective of revenue maximisation. Costs/ revenues MC 14 AC 10 8 7 0 98 130 MR AR Quantity of pizzas sold (a) Calculate the change in total supernormal profit if the restaurant changes its objective from revenue maximisation to profit maximisation. You are advised to show your working. (4)
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2 In 2022 the UK government provided 130 new licences for North Sea oil and gas exploration, in order to reduce energy prices. However, companies can take 20 years to begin to extract oil. Furthermore, they often have to continue producing oil even when prices fall because the equipment has no other uses. (Source: adapted from https://www.theguardian.com/environment/2022/dec/12/ uk-ministers-face-legal-challenge-over-north-sea-oil-and-gas-licences) (a) With reference to the data above, explain the likely numerical value of the price elasticity of supply for oil. (4)
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(b) The cross elasticity of demand for petrol cars with respect to the price of diesel cars is estimated to be +0.64. Which one of the following is the most likely impact if the price of diesel cars falls by 10%? (1) A The price of petrol cars falls by 6.4% B The price of petrol cars rises by 64% C The quantity demanded of petrol cars falls by 6.4% D The quantity demanded of petrol cars rises by 64% (Total for Question 2 = 5 marks) ■■■■ 5 Turn over DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
(b) The government subsidises dental care in the UK through the National Health Service (NHS). There has been a large decrease in the work carried out by NHS dentists. Up to 90% of practices are not accepting new NHS patients. (Source: adapted from https://www.theguardian.com/society/2023/jul/14/ mps-demand-urgent-reform-nhs-dental-services-report) Draw an externalities diagram to identify the welfare gain area from the consumption of dental care in the UK. (4) (Total for Question 3 = 5 marks) ■■■■ 7 Turn over DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA DO NOT WRITE IN THIS AREA
4 Nearly 750 000 consumers in Britain face unresolved problems with used car purchases every year. Older vehicles tend to have more faults and increase the risks facing a potential buyer. (Source: adapted from https://www.gov.uk/government/news/new- approach-to-give-second-hand-car-buyers-a-better-deal) (a) With reference to the data above, explain how imperfect market information may lead to a misallocation of resources in the used-car market. (4)
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5 The National Minimum Wage for people over 23 rose by 9.7% to £10.42 in April 2023. The industry most affected is hospitality. (Source: adapted from https://www.gov.uk/government/publications/the-national- minimum-wage-in-2023/the-national-minimum-wage-in-2023) (a) Draw a labour market diagram to show the likely impact of the increase in the National Minimum Wage for hospitality employees. (b) There has been a significant decrease in the supply of agricultural workers in the UK. Which one of the following is the most likely cause of this decrease? A Increased demand for UK-grown strawberries B Increased job security for qualified workers in the industry C Increased productivity of workers in the industry D Increased wages in the retail industry (4) (1) (Total for Question 5 = 5 marks) TOTAL FOR SECTION A = 25 MARKS 10 ■■■■ DO (^) NOT (^) WRITE (^) IN (^) THIS (^) AREA DO (^) NOT (^) WRITE (^) IN (^) THIS (^) AREA DO (^) NOT (^) WRITE (^) IN (^) THIS (^) AREA
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6 (a) With reference to Extract A, explain one likely impact of the growth of digital markets on allocative efficiency. (5)
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(b) With reference to Extract C, examine two effects of increased ‘automation’ on the demand for labour. (8)
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(c) With reference to the information provided, discuss whether the price elasticity of demand for video games is elastic or inelastic. (12)
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(d) With reference to the information provided, assess whether the market for video game development is contestable. (10)
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