2025 AQA A-Level ECONOMICS 7136/1
Paper 1 Markets and Market Failure
Question paper and Marking scheme Merged
A-level
Economics
Paper 1 Markets and Market Failure
Monday 12 May 2025 Morning Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
Instructions
• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/1.
• In Section A, answer EITHER Context 1 OR Context 2.
• In Section B, answer ONE essay.
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
• There are 40 marks for Section A and 40 marks for Section B.
Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
, 2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
The international rice market
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A:
Figure 1: Exports of rice (million Figure 2: Index of world prices for rice,
tonnes) 2010 to 2022 cereals and all food, 2021 to 2023
(2015 = 100)
Country 2010 2022
India 2.8 22.5
Thailand 10.6 8.5
Vietnam 7.0 7.5
Pakistan 3.4 3.7
USA 3.5 2.0
Rest of the world 7.9 11.4
Total 35.2 55.6
Source: International Food Policy Research Institute, Note: ‘Cereals’ includes rice and six other cereals
2023
Source: Food and Agriculture Organization, 2023
Extract B: A ban on Indian rice exports
In Nigeria, rice is the most commonly consumed food but the price of this imported cereal rose
by 46% in the year to August 2023. The sharp increase in the price of rice follows a rice export
ban by India, the world’s largest exporter. The ban, introduced in August 2022, was in response
to fears of a production shortfall in India and rising domestic prices.
Analysts warn that the world is on track for a repeat of the 2008 rice crisis when protectionist 5
policies contributed to rice prices tripling. This time the crisis could be worse, as soaring
demand, driven by population growth, combines with the effects of climate change, leading to
poor harvests. In Thailand and Vietnam, the world’s second and third largest rice exporters,
prices have risen by 14% and 22% respectively since India imposed its ban. The United Nations
World Food Programme (WFP) points out that the countries likely to be worst affected, such as 10
Nigeria, are already suffering from sky-high food prices, soaring debt and depreciating
currencies. This will result in “a staple commodity not being affordable for millions”, said a
spokesperson.
for more: tyrionpapers.com
IB/M/Jun25/7136/1
, 3
Not only has India’s share of global rice exports grown, but the amount of rice traded around the
world has doubled from 5% of global production in 1999 to over 10% today, making importing 15
countries, such as Nigeria, more vulnerable to export bans.
Consumers in Nigeria spend a large share of their incomes on food. Thus, rising prices could
force them to reduce the amount of food they eat, or they may have to cut consumption of other
necessities like energy and healthcare. In Nigeria, the demand for rice is very price inelastic.
Source: News reports, 2023
Extract C: What options do rice-importing nations have?
The rise in the price of rice is not likely to have much impact on household food budgets in more
economically developed countries (MEDCs), but the impact in less economically developed
countries (LEDCs) will be more significant.
Governments of LEDCs may try to support people on low incomes with direct cash transfers or
subsidise rice prices. However, these are costly options for governments with low tax revenues, 5
already struggling to maintain public services. An alternative would be to impose a maximum
price for consumers, as both Sri Lanka and the Philippines have done, but this creates problems
for food suppliers facing high import prices.
Many countries are trying to increase farm productivity to be less exposed to global supply
shocks such as the Indian rice export ban. Investment in irrigation, mechanisation and crop 10
science can make a difference but typically suffers from long time lags. If countries can switch
from producing other cereals to the production of rice, this may also help.
Source: News reports, 2023
0 1 Using the data in Extract A (Figure 1), calculate the difference between India’s share of
world exports of rice in 2010 and 2022.
Give your answer to one decimal place.
[2 marks]
0 2 Explain how the data in Extract A (Figure 1 and Figure 2) show that the rice export ban by
India in 2022 is likely to have had a significant impact on the world price of rice.
[4 marks]
0 3 Extract B (line 19) states: ‘In Nigeria, the demand for rice is very price inelastic’.
With the help of a diagram, explain how the Indian export ban is likely to have affected the
market for rice in Nigeria.
[9 marks]
0 4 Extract C (lines 6–7) states: ‘An alternative would be to impose a maximum price for
consumers, as both Sri Lanka and the Philippines have done’.
Using the data and your knowledge of economics, evaluate the view that imposing a
maximum price for rice is the best way for a rice-importing nation, such as Nigeria, to
ensure the affordability of a basic food for its citizens.
[25 marks]
for more: tyrionpapers.com
IB/M/Jun25/7136/1 Turn over ►
Paper 1 Markets and Market Failure
Question paper and Marking scheme Merged
A-level
Economics
Paper 1 Markets and Market Failure
Monday 12 May 2025 Morning Time allowed: 2 hours
Materials
For this paper you must have:
• an AQA 12-page answer book
• a calculator.
Instructions
• Use black ink or black ball-point pen. Pencil should only be used for drawing.
• Write the information required on the front cover of your answer book.
The Paper Reference is 7136/1.
• In Section A, answer EITHER Context 1 OR Context 2.
• In Section B, answer ONE essay.
Information
• The marks for questions are shown in brackets.
• The maximum mark for this paper is 80.
• There are 40 marks for Section A and 40 marks for Section B.
Advice
• You are advised to spend 1 hour on Section A and 1 hour on Section B.
, 2
Section A
Answer EITHER Context 1 OR Context 2.
EITHER
Context 1 Total for this context: 40 marks
The international rice market
Study Extracts A, B and C and then answer all parts of Context 1 which follow.
Extract A:
Figure 1: Exports of rice (million Figure 2: Index of world prices for rice,
tonnes) 2010 to 2022 cereals and all food, 2021 to 2023
(2015 = 100)
Country 2010 2022
India 2.8 22.5
Thailand 10.6 8.5
Vietnam 7.0 7.5
Pakistan 3.4 3.7
USA 3.5 2.0
Rest of the world 7.9 11.4
Total 35.2 55.6
Source: International Food Policy Research Institute, Note: ‘Cereals’ includes rice and six other cereals
2023
Source: Food and Agriculture Organization, 2023
Extract B: A ban on Indian rice exports
In Nigeria, rice is the most commonly consumed food but the price of this imported cereal rose
by 46% in the year to August 2023. The sharp increase in the price of rice follows a rice export
ban by India, the world’s largest exporter. The ban, introduced in August 2022, was in response
to fears of a production shortfall in India and rising domestic prices.
Analysts warn that the world is on track for a repeat of the 2008 rice crisis when protectionist 5
policies contributed to rice prices tripling. This time the crisis could be worse, as soaring
demand, driven by population growth, combines with the effects of climate change, leading to
poor harvests. In Thailand and Vietnam, the world’s second and third largest rice exporters,
prices have risen by 14% and 22% respectively since India imposed its ban. The United Nations
World Food Programme (WFP) points out that the countries likely to be worst affected, such as 10
Nigeria, are already suffering from sky-high food prices, soaring debt and depreciating
currencies. This will result in “a staple commodity not being affordable for millions”, said a
spokesperson.
for more: tyrionpapers.com
IB/M/Jun25/7136/1
, 3
Not only has India’s share of global rice exports grown, but the amount of rice traded around the
world has doubled from 5% of global production in 1999 to over 10% today, making importing 15
countries, such as Nigeria, more vulnerable to export bans.
Consumers in Nigeria spend a large share of their incomes on food. Thus, rising prices could
force them to reduce the amount of food they eat, or they may have to cut consumption of other
necessities like energy and healthcare. In Nigeria, the demand for rice is very price inelastic.
Source: News reports, 2023
Extract C: What options do rice-importing nations have?
The rise in the price of rice is not likely to have much impact on household food budgets in more
economically developed countries (MEDCs), but the impact in less economically developed
countries (LEDCs) will be more significant.
Governments of LEDCs may try to support people on low incomes with direct cash transfers or
subsidise rice prices. However, these are costly options for governments with low tax revenues, 5
already struggling to maintain public services. An alternative would be to impose a maximum
price for consumers, as both Sri Lanka and the Philippines have done, but this creates problems
for food suppliers facing high import prices.
Many countries are trying to increase farm productivity to be less exposed to global supply
shocks such as the Indian rice export ban. Investment in irrigation, mechanisation and crop 10
science can make a difference but typically suffers from long time lags. If countries can switch
from producing other cereals to the production of rice, this may also help.
Source: News reports, 2023
0 1 Using the data in Extract A (Figure 1), calculate the difference between India’s share of
world exports of rice in 2010 and 2022.
Give your answer to one decimal place.
[2 marks]
0 2 Explain how the data in Extract A (Figure 1 and Figure 2) show that the rice export ban by
India in 2022 is likely to have had a significant impact on the world price of rice.
[4 marks]
0 3 Extract B (line 19) states: ‘In Nigeria, the demand for rice is very price inelastic’.
With the help of a diagram, explain how the Indian export ban is likely to have affected the
market for rice in Nigeria.
[9 marks]
0 4 Extract C (lines 6–7) states: ‘An alternative would be to impose a maximum price for
consumers, as both Sri Lanka and the Philippines have done’.
Using the data and your knowledge of economics, evaluate the view that imposing a
maximum price for rice is the best way for a rice-importing nation, such as Nigeria, to
ensure the affordability of a basic food for its citizens.
[25 marks]
for more: tyrionpapers.com
IB/M/Jun25/7136/1 Turn over ►
