AQA A Level Economics Paper 3: Economic principles and issues June 2025 question paper 7136/3

Which one of the following best describes mandated choice?

Figure 1 shows a production possibility diagram for an economy where goods and services are produced in the private and public sectors. The economy is currently producing at point Y.

Following a change in government, it is decided that the output of public sector goods and services should be increased by VW.

What is the opportunity cost, in terms of private sector output, of this reallocation of

Which one of the following best describes how a social scientist would develop an economic theory?

Which one of the following diagrams, A, B, C or D, shows the impact on an economy of a

Which one of the following is most likely to lead to an increase in the number of people who are frictionally unemployed in the UK?

Which one of the following is most likely to indicate that a government is trying to cause a significant change in the pattern of economic activity?

Table 1 shows the amount of capital, land and labour employed and the output of a firm before and after it expands to increase its productive capacity.

Which one of the following do the data in Table 1 show has resulted from the expansion?

An entrepreneur, and sole owner, has £300 000 invested in a firm. The same investment would generate an annual rate of return of 35% if it was transferred to a different market.

Table 2 shows the firm’s annual total costs of production, not including the opportunity cost of the capital the entrepreneur has invested, and annual total revenue in the current market.

How much abnormal profit is the business making each year in its current market?

Land is an example of a resource that is in composite demand. Land can be used to produce soya beans and for forestry. Between January 2019 and January 2024, the market price of soya beans increased by almost 40%. This was largely driven by the rise in demand for soya beans.

Which one of the following diagrams, A, B, C or D, shows the most likely effect of the increase in demand for soya beans on the market for land that is used for forestry?

Which one of the following best explains the operation of the accelerator process?

Figure 2 shows the long-run trend rate of unemployment and the actual rate of unemployment in a country over a period of time.

At which one of the following points was the economy most likely to be in the recession phase of its economic cycle?

Table 3 shows the value of the Human Development Index (HDI) for three countries in 2021 and figures from the index’s health and education dimensions.

It can be deduced from Table 3 that in 2021

Figure 3 below shows the supply curve (S) for cakes.

Which one of the following can be concluded from Figure 3 ?

The supply of cakes

Figure 4 shows a market for houses to rent. The current average monthly rent in the

Why is this market in disequilibrium at an average monthly rent of R₁?

A large company experiences a significant fall in its year-end profits. Reports suggest it is a consequence of the divorce of ownership from control within the company.

Which one of the following is most likely to explain why the divorce of ownership from control may have harmed the firm’s performance?

Table 4 shows the index of consumer prices and the unemployment rate for an economy. The data is for the end of each quarter in a particular year. The index of consumer prices for the final quarter of the previous year was 120.9.

According to the data, it can be concluded that

Which one of the following is most likely to be included in a broad measure of the money supply but not in a narrow measure of the money supply?

Table 5 shows the liquidity ratio and capital ratio for two, otherwise identical, banks.

All other things being equal, it is likely that

Figure 5 shows the average cost (AC), marginal cost (MC), average revenue (AR) and marginal revenue (MR) curves for a firm in a perfectly competitive market. The entry of new firms shifts the AR and MR curves from AR₁ = MR₁ to AR₂ = MR₂.

All other things being equal, which one of the following combinations of statements would be correct for a profit-maximising firm?

Figure 6 shows the average revenue (AR), marginal revenue (MR) and marginal cost (MC) curves of a train-operating firm for peak-time and off-peak passengers. It also shows the price (P₁) that all passengers currently pay.

The train-operating firm introduces price discrimination to maximise profits. What is the effect on consumer surplus?

Table 6 shows the size of the UK labour force and the percentage of the labour force belonging to a trade union in 2012 and 2022.

According to the data in Table 6, what is the percentage fall, to one decimal place, in the number of workers belonging to a trade union between 2012 and 2022?

Table 7 shows four situations in which one group of workers earns less than another and states the reason given by employers.

Which one is the best example of wage discrimination?

Which one of the following is most likely to lead to individuals who are currently in relative

Country X and Country Y have identical amounts of the factors of production that can be used to produce either canoes or rowing boats. Figure 7 shows the production possibility frontiers (PPFs) for the two countries.

Which one of the following is supported by the data in Figure 7 ?

Figure 8 shows the domestic demand (D_d) and supply (S_d) curves for paper in a country.

Figure 8 also shows the world supply curve when the country does not have any restrictions on imports of paper (S_w) and the world supply curve when a tariff of $10 per unit is imposed on paper imported from the rest of the world (S_wt).

Following the introduction of the tariff, what is the change in the amount the country has to pay to the rest of the world for the paper it imports?

Which one of the following is a supply-side policy that is most likely to lead to an improvement in the balance of trade in goods and services on the current account of the UK’s balance of payments?

A government announces that, over a 10 year period, it plans to reduce the number of tradable pollution permits it issues each year.

Which one of the following is the most likely response from firms in industries affected by

All other things being equal, which one of the following is most likely to be a consequence

Table 8 shows figures for the population (millions) and GDP ($ billions) of four countries.

What is the mean GDP per capita for the four countries?

Turn over for Section B

To what extent, if at all, do the data suggest that the contribution the automotive industry makes to the UK economy has declined significantly since 2015? You must use the data in Extract B to support your assessment.

Explain factors that affect the UK’s balance of trade in motor vehicles.

After considering Extract D, and the original evidence in Extracts A, B and C, would you recommend that the Government continue to subsidise firms to encourage them to set up gigafactories to produce batteries in the UK?

Justify your recommendation.