Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
ECONOMICS
Paper 3 Economic Principles and Issues
Thursday 4 June 2026 Morning Time allowed: 2 hours
Materials
For this paper you must have: For Examiner’s Use
• the Insert
• a calculator. Section Mark
A
Instructions B
• Answer all questions.
• 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.
• 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.
*JUN267136301*
IB/M/Jun26/G4002/V6 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 normative statement?
[1 mark]
A A fall in Bank Rate will cause a rise in home ownership.
B All homeowners purchase their home with a mortgage.
C Increased home ownership is good for the economy.
D Mortgage costs fall when Bank Rate decreases.
0 2 Which one of the following is the best definition of ‘external economies of scale’?
[1 mark]
A The range of output over which a firm achieves productive efficiency.
B The reduction in the long-run average costs as the size of a firm increases.
C When a firm benefits from an expansion of the industry to which it belongs.
D When the growth of a firm leads to a fall in the price it pays suppliers for
raw materials.
*02*
IB/M/Jun26/7136/3
, 3
Do not write
outside the
0 3 Figure 1 shows how a change in the price of 1kg of beef affects the quantity of lamb a box
butcher sells each day.
Figure 1
According to Figure 1, the cross elasticity of demand for lamb with respect to a change in
the price of beef is +1.5 when the price of 1kg of beef changes from
[1 mark]
A £6 to £8
B £8 to £6
C £8 to £10
D £10 to £8
Turn over for the next question
Turn over ►
*03*
IB/M/Jun26/7136/3
, 4
Do not write
outside the
0 4 Which combination, A, B, C or D, best identifies the difference between debt and equity? box
[1 mark]
Debt Equity
Funds provided by the owners of a
A Funds raised by borrowing
business
B Securities that represent a loan to The price of a company's shares in
the government financial markets
C The amount of interest due on Assets that can be quickly
borrowed funds converted to cash
D The loss made by a business Dividends paid to shareholders
0 5 According to Fisher’s equation of exchange, if there is no change in the money supply, an
increase in the velocity of circulation will lead to a
[1 mark]
A fall in real national income.
B fall in the price level.
C rise in nominal national income.
D rise in the value of the currency.
*04*
IB/M/Jun26/7136/3
Centre number Candidate number
Surname
Forename(s)
Candidate signature
I declare this is my own work.
A-level
ECONOMICS
Paper 3 Economic Principles and Issues
Thursday 4 June 2026 Morning Time allowed: 2 hours
Materials
For this paper you must have: For Examiner’s Use
• the Insert
• a calculator. Section Mark
A
Instructions B
• Answer all questions.
• 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.
• 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.
*JUN267136301*
IB/M/Jun26/G4002/V6 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 normative statement?
[1 mark]
A A fall in Bank Rate will cause a rise in home ownership.
B All homeowners purchase their home with a mortgage.
C Increased home ownership is good for the economy.
D Mortgage costs fall when Bank Rate decreases.
0 2 Which one of the following is the best definition of ‘external economies of scale’?
[1 mark]
A The range of output over which a firm achieves productive efficiency.
B The reduction in the long-run average costs as the size of a firm increases.
C When a firm benefits from an expansion of the industry to which it belongs.
D When the growth of a firm leads to a fall in the price it pays suppliers for
raw materials.
*02*
IB/M/Jun26/7136/3
, 3
Do not write
outside the
0 3 Figure 1 shows how a change in the price of 1kg of beef affects the quantity of lamb a box
butcher sells each day.
Figure 1
According to Figure 1, the cross elasticity of demand for lamb with respect to a change in
the price of beef is +1.5 when the price of 1kg of beef changes from
[1 mark]
A £6 to £8
B £8 to £6
C £8 to £10
D £10 to £8
Turn over for the next question
Turn over ►
*03*
IB/M/Jun26/7136/3
, 4
Do not write
outside the
0 4 Which combination, A, B, C or D, best identifies the difference between debt and equity? box
[1 mark]
Debt Equity
Funds provided by the owners of a
A Funds raised by borrowing
business
B Securities that represent a loan to The price of a company's shares in
the government financial markets
C The amount of interest due on Assets that can be quickly
borrowed funds converted to cash
D The loss made by a business Dividends paid to shareholders
0 5 According to Fisher’s equation of exchange, if there is no change in the money supply, an
increase in the velocity of circulation will lead to a
[1 mark]
A fall in real national income.
B fall in the price level.
C rise in nominal national income.
D rise in the value of the currency.
*04*
IB/M/Jun26/7136/3
