Paper 1 - CCEA...Economics Paper 1 [9281] FRIDAY 24 MAY, AFTERNOON TIME 1 hour 45 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number in the spaces provided

11918

General Certificate of Secondary Education2019

Centre Number

Candidate Number

*G92

81*

*G9281*

Economics

Paper 1

[G9281]FRIDAY 24 MAY, AFTERNOON

TIME1 hour 45 minutes.

INSTRUCTIONS TO CANDIDATESWrite your Centre Number and Candidate Number in the spaces provided at the top of this page.You should answer all questions in the spaces provided.If you do not have enough space to complete your answer, extra lined pages are provided at the back of the booklet.Answer all questions in Section A.Answer both questions in Section B.Answer one question from questions 6, 7 and 8 in Section C.

INFORMATION FOR CANDIDATESThe total mark for this paper is 90.Any working should be clearly shown since marks may be awarded for partially correct solutions.Your quality of written communication will be taken into account in assessing your answers to question 4(d) in Section B and the question that you choose to answer from Section C.

ADVICE TO CANDIDATESYou should take into account the maximum marks available when deciding how much time to spend on each question.

For Examiner’s use only

Question Number Marks

Section A

1 2 3

Section B

4 5

Section C

6 7 8

Total Marks

211918

Examiner Only Marks Remark

Section A

Answer all three questions

1 Many economists believe that foreign aid is essential to help developing countries.

(a) Explain one economic characteristic of a developing country.

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(b) Explain what is meant by foreign aid.

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(c) Explain one advantage and one disadvantage of foreign aid.

Advantage

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

Disadvantage

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

3 [Turn over11918


2 Burgerland is a large takeaway restaurant chain. Research suggests that if Burgerland increases the price of its best selling burger meal from £5 to £6, sales will fall by 5%. To help with its decision, Burgerland has asked an economist to calculate Price Elasticity of Demand (PED).

(a) What is meant by Price Elasticity of Demand (PED)?

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(b) Using the formula outlined below, calculate the Price Elasticity of Demand for burgers.

Formula: PED = % change in quantity demanded% change in price

Calculations

% change in quantity demanded = 5%

% change in price = _______________________

PED = __________________________________[2]

(c) Should Burgerland increase the price of burgers? Briefly explain your answer.

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

411918


3 Some politicians have called for a reduction in the rate of income tax.

(a) What is meant by income tax?

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(b) Explain one reason why the government collects income tax.

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(c) Explain one possible effect on the economy if the government reduces income tax.

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

5 [Turn over11918


Section B

Answer both questions

4 Northern Ireland is a major milk producer. As well as being an important consumer product, milk is an important ingredient used by businesses producing food products such as cheese and yogurt. Figure 1 below shows how the price of milk that producers received varied between January 2016 and July 2017.

Jan

16 Feb

Mar

Apr

May Jun

Jul

Aug

Sep Oct

Nov

Dec

Jan

17 Feb

Mar

Apr

May Jun

Jul

30.00

25.00

20.00

15.00

10.00

5.00

0.00

Price of Milk per Litre – January 2016 to July 2017

Month

Penc

e pe

r Litr

e

Fig. 1: Milk Prices for Milk Producers in Northern Ireland

(a) Describe what happened to the price of milk between January 2016and July 2017.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [4]

© DAERA / Crown Copyright. Adapted from: https://www.daera-ni.gov.uk/articles/milk-price-quality-and-production-statistics

611918


(b) Table 1 below shows the demand for, and supply of, milk in thesummer months of 2017.

Price Per Litre Quantity Demanded (000 Litres)

Quantity Supplied (000 Litres)

10 250 100

15 225 125

20 200 150

25 175 175

30 150 200

35 125 225

Using this information, plot the demand and supply curve on the graph paper opposite to show the market for milk in the summer months of 2017.

You should clearly label:

(i) The axes

(ii) The demand curve

(iii) The supply curve

(iv) The equilibrium (market clearing) price

(v) The equilibrium quantity [6]

(c) The supply of milk increases by 25 000 litres at every price. Using yourdiagram in part (b) opposite, show how this increase in supply willchange the equilibrium (market clearing) price and quantity. Label thechanges on your diagram. [4]

© CCEA

7 [Turn over11918


811918


(d) Discuss the possible impact of rising milk prices on:

• milk producers and other businesses that use milk as araw material.

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

_______________________________________________________

____________________________________________________ [6]

9 [Turn over11918


5 Study the information below and answer the questions that follow.

July2012

January2012

January2013

July2013

January2014

July2014

January2015

July2015

January2016

July2016

January2017

July2017

December2017

%4

3

2

1

0

UK Inflation from January 2012 to December 2017

CPI: Consumer Price Index (% change)

Source: Graph by CCEA. Data from: ONS under Open Government Licence v3.0

(a) Explain what is meant by inflation.

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [2]

(b) Describe what has happened to UK inflation between January 2012and December 2017.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [4]

1011918


(c) Explain two reasons why the government would be concerned aboutinflation rising.

1. _______________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

2. _______________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [6]

11 [Turn over11918


(d) Identify two policies the government could use to reduce inflation anddiscuss the impact of each policy on the economy.

Policy One _________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [4]

Policy Two _________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

1211918

Examiner Only Marks Remark _________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [4]

13 [Turn over11918


Section C

Answer one question

6 The government is concerned about the increase in the number of consumers who are turning to credit to buy essential items and about the drop in the level of savings. Record low interest rates over several years have changed financial behaviour with fewer people planning for their long-term future at a time when the state pension age has increased.

(a) Explain the difference between credit and non-credit meansof payment.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [6]

© Adapted from The Guardian, "The UK's debt crisis – in figures". https://www.theguardian.com/business/2017/sep/18/uk-debt-crisis-credit-cards-car-loans

1411918


(b) Young workers are encouraged to plan for the future. Analyse tworelevant financial products that they may choose.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [9]

15 [Turn over11918


(c) Discuss the costs and benefits to the economy of a rise inconsumer credit.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_____________________________________________________ [15]

1611918


7 The government has announced that new diesel and petrol cars and vans will be banned in the UK from 2040. This policy aims to promote the use of more environmentally friendly vehicles as there have been concerns for some time about the high social costs of petrol and diesel vehicles.

(a) Explain what is meant by a social cost.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [6]

© http://www.bbc.co.uk/news/uk Adapted from "New diesel and petrol vehicles to be banned from 2040 in UK".

17 [Turn over11918


(b) Explain three social costs that occur when consumers choose to own and use cars as their main form of transport.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [9]

1811918


(c) Discuss the impact on individuals, firms and the economy as a whole of the plan to ban petrol and diesel cars.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_____________________________________________________ [15]

19 [Turn over11918


8 Trade unions have campaigned for an increase in wages for workers. They argue that years of low pay increases have meant many workers face poverty in spite of the legal protection of the National Minimum Wage (NMW).

(a) Explain the role of a trade union and how it may affect the labour market.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [6]

2011918


(b) Examine the possible advantages and disadvantages of the National Minimum Wage for the UK labour market.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

______________________________________________________ [9]

21 [Turn over11918


(c) Discuss the costs and benefits to the UK economy of a general increase in wages.

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_________________________________________________________

_____________________________________________________ [15]

2211918


Continuation page (Use this page if you need extra space to complete your answers.)

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

23 [Turn over11918



________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

2411918



________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

2511918



________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

________________________________________________________________

THIS IS THE END OF THE QUESTION PAPER

Permission to reproduce all copyright material has been applied for.In some cases, efforts to contact copyright holders may have been unsuccessful and CCEAwill be happy to rectify any omissions of acknowledgement in future if notified.

11918/4

Documents

Paper 1 - CCEA...Economics Paper 1 [9281] FRIDAY 24 MAY, AFTERNOON TIME 1 hour 45 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number in the spaces provided