AQA_2024: A-level Economics - Paper 3
Economic Principles and Issues.
(Merged Question Paper and Marking Scheme)
Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signat ure
I declare this is my own work.
A-level
ECONOMICS
Paper 3 Economic Principles and Issues
Friday 7 June 2024 Morning Time allowed: 2 hours
Materials
For Examiner’s Use
For this paper you must have:
the Insert Section Mark
a calculator.
A
Instructions B
Answer all questions. TOTAL
Use black ink or black ball-point pen. Pencil should only be used for drawing.
Fill in the boxes at the top of this page.
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 answer book. Cross through any work that you do not want to be marked.
Information
The maximum mark for this paper is 80.
The marks for questions are shown in brackets.
No deductions will be made for wrong answers.
,For A-level Economics Paper 3: Economic Principles and Issues, here’s a concise revision guide focusing on
the key areas to cover:
1. Microeconomic Principles:
Demand and Supply:
o Law of Demand: As the price of a good decreases, the quantity demanded increases, ceteris
paribus.
o Law of Supply: As the price of a good increases, the quantity supplied increases, ceteris
paribus.
o Market Equilibrium: The point where the quantity demanded equals the quantity supplied.
Elasticity:
o Price Elasticity of Demand (PED): Measures how responsive demand is to price changes. If
PED > 1, demand is elastic; if PED < 1, demand is inelastic.
o Price Elasticity of Supply (PES): Measures how responsive supply is to price changes.
o Income Elasticity of Demand (YED): Measures how demand changes as income changes.
o Cross Price Elasticity (XED): Measures how the demand for one good responds to the price
change of another good (substitutes or complements).
Consumer and Producer Surplus:
o Consumer Surplus: The difference between what consumers are willing to pay and what they
actually pay.
o Producer Surplus: The difference between what producers are willing to sell for and what they
actually receive.
Market Failure:
o Externalities: Costs or benefits that affect third parties not involved in the economic transaction
(e.g., pollution as a negative externality, education as a positive externality).
o Public Goods: Non-excludable and non-rivalrous goods (e.g., street lighting, national defense).
o Monopolies and Oligopolies: Market structures that lead to market failure by reducing
competition, raising prices, and lowering quality.
2. Macroeconomic Principles:
Economic Growth:
o Long-Run Growth: Driven by increases in productive capacity due to capital accumulation,
technological progress, and labor force growth.
o Short-Run Growth: Resulting from higher demand or utilization of existing resources.
Inflation:
o Demand-pull Inflation: Caused by increased demand for goods and services exceeding the
economy’s productive capacity.
o Cost-push Inflation: Results from an increase in production costs, such as raw material prices
or wages.
Unemployment:
o Cyclical Unemployment: Unemployment due to downturns in the economy.
o Structural Unemployment: Occurs when workers' skills do not match the needs of the
economy.
o Frictional Unemployment: Short-term unemployment during transitions between jobs.
Monetary Policy:
o Interest Rates: Central banks adjust interest rates to control inflation and manage economic
activity. Lower rates stimulate borrowing and investment, while higher rates slow down the
economy.
o Quantitative Easing (QE): The central bank injects money into the economy to stimulate
demand, especially when interest rates are already low.
IB/G/Jun24/G4001/E9 7136/3
, 2
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 WRONG METHODS
If you want to change your answer you must cross out your original answer as shown.
If you wish to return to an answer previously crossed out, ring the answer you now wish to select
as shown.
0 1 Which one of the following is a consequence of the basic economic problem of limited
resources and unlimited wants?
[1 mark]
A All goods and services will have a market price
B Employment of factors of production has an opportunity cost
C Markets are unable to allocate resources efficiently
D There will not be an excess supply in markets
0 2 A profit-maximising firm, in the service sector, needs to recruit a new employee. Which
one of the following explains why asymmetric information could mean that the most
suitable person is not chosen?
[1 mark]
A It is difficult to calculate the marginal revenue productivity of workers in the
service sector
B Occupational immobility of labour means that there is a limited supply of
workers with the right skill set
C The firm may have to recruit the worker from the local area because labour
is often geographically immobile
D The firm is unlikely to know everything about job applicant’s skills, abilities
and motivation
IB/G/Jun24/7136/3
, 3
Do not write
outside the
0 3 box
Figure 1 shows the production possibility boundary for petrol-powered cars and electric-
powered cars in a country's car industry.
Figure 1
If production has moved from Point A to Point B, which one of the following must be true?
[1 mark]
A Allocative efficiency in the car industry is unchanged
B Demand for electric-powered vehicles has increased
C Productive efficiency in the car industry is unchanged
D Static efficiency in the car industry has improved
0 4 A household's annual income increases from £35 000 to £38 500. All other things being
equal, if the household's income elasticity of demand for Good X is –0.2 and its income
elasticity of demand for Good Y is 0.4, which one of the following statements is correct?
[1 mark]
A Spending on Good X will fall by £70 and spending on Good Y will
increase by £140
B Spending on Good X will fall by £700 and spending on Good Y will
increase by £1400
C Spending on Good X will fall by 2% and spending on Good Y will
increase by 4%
D Spending on Good X will fall by 20% and spending on Good Y will
increase by 40%
Turn over ►
IB/G/Jun24/7136/3
Economic Principles and Issues.
(Merged Question Paper and Marking Scheme)
Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signat ure
I declare this is my own work.
A-level
ECONOMICS
Paper 3 Economic Principles and Issues
Friday 7 June 2024 Morning Time allowed: 2 hours
Materials
For Examiner’s Use
For this paper you must have:
the Insert Section Mark
a calculator.
A
Instructions B
Answer all questions. TOTAL
Use black ink or black ball-point pen. Pencil should only be used for drawing.
Fill in the boxes at the top of this page.
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 answer book. Cross through any work that you do not want to be marked.
Information
The maximum mark for this paper is 80.
The marks for questions are shown in brackets.
No deductions will be made for wrong answers.
,For A-level Economics Paper 3: Economic Principles and Issues, here’s a concise revision guide focusing on
the key areas to cover:
1. Microeconomic Principles:
Demand and Supply:
o Law of Demand: As the price of a good decreases, the quantity demanded increases, ceteris
paribus.
o Law of Supply: As the price of a good increases, the quantity supplied increases, ceteris
paribus.
o Market Equilibrium: The point where the quantity demanded equals the quantity supplied.
Elasticity:
o Price Elasticity of Demand (PED): Measures how responsive demand is to price changes. If
PED > 1, demand is elastic; if PED < 1, demand is inelastic.
o Price Elasticity of Supply (PES): Measures how responsive supply is to price changes.
o Income Elasticity of Demand (YED): Measures how demand changes as income changes.
o Cross Price Elasticity (XED): Measures how the demand for one good responds to the price
change of another good (substitutes or complements).
Consumer and Producer Surplus:
o Consumer Surplus: The difference between what consumers are willing to pay and what they
actually pay.
o Producer Surplus: The difference between what producers are willing to sell for and what they
actually receive.
Market Failure:
o Externalities: Costs or benefits that affect third parties not involved in the economic transaction
(e.g., pollution as a negative externality, education as a positive externality).
o Public Goods: Non-excludable and non-rivalrous goods (e.g., street lighting, national defense).
o Monopolies and Oligopolies: Market structures that lead to market failure by reducing
competition, raising prices, and lowering quality.
2. Macroeconomic Principles:
Economic Growth:
o Long-Run Growth: Driven by increases in productive capacity due to capital accumulation,
technological progress, and labor force growth.
o Short-Run Growth: Resulting from higher demand or utilization of existing resources.
Inflation:
o Demand-pull Inflation: Caused by increased demand for goods and services exceeding the
economy’s productive capacity.
o Cost-push Inflation: Results from an increase in production costs, such as raw material prices
or wages.
Unemployment:
o Cyclical Unemployment: Unemployment due to downturns in the economy.
o Structural Unemployment: Occurs when workers' skills do not match the needs of the
economy.
o Frictional Unemployment: Short-term unemployment during transitions between jobs.
Monetary Policy:
o Interest Rates: Central banks adjust interest rates to control inflation and manage economic
activity. Lower rates stimulate borrowing and investment, while higher rates slow down the
economy.
o Quantitative Easing (QE): The central bank injects money into the economy to stimulate
demand, especially when interest rates are already low.
IB/G/Jun24/G4001/E9 7136/3
, 2
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 WRONG METHODS
If you want to change your answer you must cross out your original answer as shown.
If you wish to return to an answer previously crossed out, ring the answer you now wish to select
as shown.
0 1 Which one of the following is a consequence of the basic economic problem of limited
resources and unlimited wants?
[1 mark]
A All goods and services will have a market price
B Employment of factors of production has an opportunity cost
C Markets are unable to allocate resources efficiently
D There will not be an excess supply in markets
0 2 A profit-maximising firm, in the service sector, needs to recruit a new employee. Which
one of the following explains why asymmetric information could mean that the most
suitable person is not chosen?
[1 mark]
A It is difficult to calculate the marginal revenue productivity of workers in the
service sector
B Occupational immobility of labour means that there is a limited supply of
workers with the right skill set
C The firm may have to recruit the worker from the local area because labour
is often geographically immobile
D The firm is unlikely to know everything about job applicant’s skills, abilities
and motivation
IB/G/Jun24/7136/3
, 3
Do not write
outside the
0 3 box
Figure 1 shows the production possibility boundary for petrol-powered cars and electric-
powered cars in a country's car industry.
Figure 1
If production has moved from Point A to Point B, which one of the following must be true?
[1 mark]
A Allocative efficiency in the car industry is unchanged
B Demand for electric-powered vehicles has increased
C Productive efficiency in the car industry is unchanged
D Static efficiency in the car industry has improved
0 4 A household's annual income increases from £35 000 to £38 500. All other things being
equal, if the household's income elasticity of demand for Good X is –0.2 and its income
elasticity of demand for Good Y is 0.4, which one of the following statements is correct?
[1 mark]
A Spending on Good X will fall by £70 and spending on Good Y will
increase by £140
B Spending on Good X will fall by £700 and spending on Good Y will
increase by £1400
C Spending on Good X will fall by 2% and spending on Good Y will
increase by 4%
D Spending on Good X will fall by 20% and spending on Good Y will
increase by 40%
Turn over ►
IB/G/Jun24/7136/3
