Please write clearly in block capitals.
Centre number Candidate number
Surname
Forename(s)
Candidate signatu re
I declare this is my own work.
AS
ECONOMICS
Paper 1 The Operation of Markets and Market Failure
Monday 15 May 2024 Morning Time allowed: 1 hour 30 minutes
Materials
For Examiner’s Use
For this paper you must have:
the Insert Section Mark
a calculator.
A
Instructions B
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.
Answer all questions in Section A.
Answer either Context 1 or Context 2 in Section B.
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 book. Cross through any work you do not want to be
marked.
Information
The maximum mark for this paper is 70.
The marks for questions are shown in brackets.
No deductions will be made for wrong answers.
7135/1
, 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 gives rise to opportunity cost?
[1 mark]
A Alternative uses for resources
B Market failures for many goods
C The methodology of positive economics
D The presence of externalities
0 2 A bakery decides to increase the price of the bread that it sells.
Which one of the following price elasticities of demand for bread will result in the largest
increase in the bakery’s total revenue?
[1 mark]
A –0.4
B –0.8
C –1.0
D –2.0
IB/M/Jun24/7135/1
, 3
Do not write
outside the
0 3 Figure 1 shows the demand (D) and supply (S) curves for scooters. box
Market equilibrium is initially at E, the intersection of D1 and S1.
Figure 1
The government announces a cut in the indirect tax on scooters and an increase in the
indirect tax on bicycles, a substitute for scooters.
Which one of the following is most likely to be the new equilibrium in the market for
scooters?
[1 mark]
A F
B G
C H
D I
Turn over ►
IB/M/Jun24/7135/1
, 4
Do not write
outside the
box
0 4 A soap manufacturer experiences a fall in long-run average costs. This is most likely to
be the result of
[1 mark]
A fewer external economies of scale.
B lower labour productivity.
C opportunities for internal economies of scale.
D total costs increasing by more than output.
0 5 A government decides that visitor centres in nature reserves are merit goods and
therefore increases their provision.
It can be concluded that this decision
[1 mark]
A avoided government failure.
B did not have an opportunity cost.
C ensured provision of a public good.
D involved a normative judgement.
0 6 The median income is higher in country W than in country Z.
It can be concluded that
[1 mark]
A incomes are more equitably distributed
in country W than in country Z.
B incomes are more unequally distributed
in country Z than in country W.
C the mean income may be higher or lower
in country Z compared with country W.
D the ratio of the highest to lowest income is
greater in country W than in country Z.
IB/M/Jun24/7135/1
Centre number Candidate number
Surname
Forename(s)
Candidate signatu re
I declare this is my own work.
AS
ECONOMICS
Paper 1 The Operation of Markets and Market Failure
Monday 15 May 2024 Morning Time allowed: 1 hour 30 minutes
Materials
For Examiner’s Use
For this paper you must have:
the Insert Section Mark
a calculator.
A
Instructions B
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.
Answer all questions in Section A.
Answer either Context 1 or Context 2 in Section B.
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 book. Cross through any work you do not want to be
marked.
Information
The maximum mark for this paper is 70.
The marks for questions are shown in brackets.
No deductions will be made for wrong answers.
7135/1
, 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 gives rise to opportunity cost?
[1 mark]
A Alternative uses for resources
B Market failures for many goods
C The methodology of positive economics
D The presence of externalities
0 2 A bakery decides to increase the price of the bread that it sells.
Which one of the following price elasticities of demand for bread will result in the largest
increase in the bakery’s total revenue?
[1 mark]
A –0.4
B –0.8
C –1.0
D –2.0
IB/M/Jun24/7135/1
, 3
Do not write
outside the
0 3 Figure 1 shows the demand (D) and supply (S) curves for scooters. box
Market equilibrium is initially at E, the intersection of D1 and S1.
Figure 1
The government announces a cut in the indirect tax on scooters and an increase in the
indirect tax on bicycles, a substitute for scooters.
Which one of the following is most likely to be the new equilibrium in the market for
scooters?
[1 mark]
A F
B G
C H
D I
Turn over ►
IB/M/Jun24/7135/1
, 4
Do not write
outside the
box
0 4 A soap manufacturer experiences a fall in long-run average costs. This is most likely to
be the result of
[1 mark]
A fewer external economies of scale.
B lower labour productivity.
C opportunities for internal economies of scale.
D total costs increasing by more than output.
0 5 A government decides that visitor centres in nature reserves are merit goods and
therefore increases their provision.
It can be concluded that this decision
[1 mark]
A avoided government failure.
B did not have an opportunity cost.
C ensured provision of a public good.
D involved a normative judgement.
0 6 The median income is higher in country W than in country Z.
It can be concluded that
[1 mark]
A incomes are more equitably distributed
in country W than in country Z.
B incomes are more unequally distributed
in country Z than in country W.
C the mean income may be higher or lower
in country Z compared with country W.
D the ratio of the highest to lowest income is
greater in country W than in country Z.
IB/M/Jun24/7135/1
