OCR A Level Economics Microeconomics June 2022 question paper H460/01

1 (a) Explain what is meant by the term ‘subsidy’.

“…more taxes may be imposed to change the marginal private cost of using petrol cars, so that the price paid is closer to the marginal social cost inflicted on society.” Lines 36–38

Explain, using an appropriate diagram, how this could be achieved.

Refer to lines 40–42.

Calculate the percentage change in price required to achieve a 6.5% fall in demand for petrol in the short run.

Using the data in Fig. 2, explain how there are economies of scale in the global production of car batteries.

Evaluate, using evidence from the stimulus material, whether it is a disadvantage if the

market for car battery production is a natural monopoly.

* Evaluate, using evidence from the stimulus material, the factors which may influence the

choice of objectives for a firm such as Shell.

3* The education sector has the highest level of trade union membership in the UK, with over 50% of full-time teachers in a trade union. Approximately 90% of all teachers work in the state sector.

Evaluate, using an appropriate diagram(s), the impact of a bilateral monopoly on equilibrium in the

labour market.

5* Supporters of a centrally planned economic system believe a central government can achieve social and national objectives more efficiently than a market economy. For example, they highlight the increase in income inequality in China since it has introduced market-based reforms.

Evaluate whether it is possible to allocate resources efficiently in a centrally planned economic

system.