A-LEVEL ECONOMICS
QUESTIONS
Edexcel
A
, This workbook includes questions from past exam
papers. It covers Theme 1, Markets and Market
Failure, and is arranged according to topic and in
order of appearance in the specification.
A detailed table of contents has been provided to
you. You should attempt each question 2-3x.
Repetition is key to success.
Focus on questions that cover topics you’re weakest
in first. Once you become more confident with these,
move on to attempt the rest of the workbook.
Key Questions to Note:
• Questions marked with an asterisk (*) are examined
regularly and have appear in exams each year.
• Questions marked with two asterisks (**) indicate
questions tested rigourously, sometimes multple
times within the same paper.
• Solutions to these questions can be found within
the community section on the website:
www.excesslearning.com
1
,CONTENTS
Theme 1:
Introduction to Markets and Market Failure
1.1 Nature of economics
a. Positive and Normative Statements 5
b. Free market economies, mixed economy and command 5
economy
c. Specialisation and division of labour 6
d. Production possibility frontiers * 7
1.2 How markets work *
a. Demand and Supply ** 10
b. Diminishing Marginal Utility 14
c. Price Elasticity of Demand (PED) 15
d. Cross Price Elasticity of Demand (XED) 19
e. Income Elasticity of Demand (YED) 20
f. Price Elasticity of Supply (PES) 21
g. Price Mechanism 22
h. Consumer Surplus 22
i. Producer Surplus 24
j. Taxes ** 24
k. Subsidies ** 27
1.3 Market failure *
a. Externalities 30
b. Public goods 34
c. Information gaps 35
2
, 1.4. Government Intervention **
a. Government intervention in markets
• Indirect taxation (ad valorem and specific) - see 1.2
above
• Subsidies - see 1.2 above
• Maximum and minimum prices 37
b. Other methods of government intervention:
• Trade pollution permits
• State provision of public goods 40
• Provision of information
• Regulation
c. Government failure
4
QUESTIONS
Edexcel
A
, This workbook includes questions from past exam
papers. It covers Theme 1, Markets and Market
Failure, and is arranged according to topic and in
order of appearance in the specification.
A detailed table of contents has been provided to
you. You should attempt each question 2-3x.
Repetition is key to success.
Focus on questions that cover topics you’re weakest
in first. Once you become more confident with these,
move on to attempt the rest of the workbook.
Key Questions to Note:
• Questions marked with an asterisk (*) are examined
regularly and have appear in exams each year.
• Questions marked with two asterisks (**) indicate
questions tested rigourously, sometimes multple
times within the same paper.
• Solutions to these questions can be found within
the community section on the website:
www.excesslearning.com
1
,CONTENTS
Theme 1:
Introduction to Markets and Market Failure
1.1 Nature of economics
a. Positive and Normative Statements 5
b. Free market economies, mixed economy and command 5
economy
c. Specialisation and division of labour 6
d. Production possibility frontiers * 7
1.2 How markets work *
a. Demand and Supply ** 10
b. Diminishing Marginal Utility 14
c. Price Elasticity of Demand (PED) 15
d. Cross Price Elasticity of Demand (XED) 19
e. Income Elasticity of Demand (YED) 20
f. Price Elasticity of Supply (PES) 21
g. Price Mechanism 22
h. Consumer Surplus 22
i. Producer Surplus 24
j. Taxes ** 24
k. Subsidies ** 27
1.3 Market failure *
a. Externalities 30
b. Public goods 34
c. Information gaps 35
2
, 1.4. Government Intervention **
a. Government intervention in markets
• Indirect taxation (ad valorem and specific) - see 1.2
above
• Subsidies - see 1.2 above
• Maximum and minimum prices 37
b. Other methods of government intervention:
• Trade pollution permits
• State provision of public goods 40
• Provision of information
• Regulation
c. Government failure
4
