7135/1
Paper 1 The Operation of Markets and Market Failure
Question Paper + Mark scheme [MERGED]
June 2022
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AS
ECONOMICS
Paper 1 The Operation of Markets and Market Failure
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.
*jun227135101*
IB/M/Jun22/E6 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 Choice is central to the economic problem because
A incomes are unequally distributed.
B most resources are scarce.
C people’s wants are greater than their needs.
D people’s wants are limited.
[1 mark]
0 2 A fast food restaurant is willing to supply 3000 burgers a week at a market price of £5 a
burger. The price elasticity of supply of burgers is 2. If the market price falls to £4 a
burger, the number of burgers that the restaurant will be willing to supply will be
A 1800
B 2700
C 3300
D 4200
[1 mark]
*02*
IB/M/Jun22/7135/1
, 3
Do not write
outside the
0 3 Figure 1 shows the long-run average cost curve (LRAC) for a firm. box
Figure 1
Which one of the following movements along the curve shows a reduction in diseconomies
of scale?
A V to W
B X to W
C X to Y
D Z to Y
[1 mark]
0 4 A government decides to increase its subsidy to rail services to encourage more people to
travel by rail. The subsidy is most likely to be successful if rail travel has a
A demand that is elastic with respect to price.
B demand that is inelastic with respect to price.
C high positive income elasticity of demand.
D negative cross elasticity of demand with respect to car travel.
[1 mark]
Turn over ►
*03*
IB/M/Jun22/7135/1
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