AS Essay Questions Practice - 8 marks
Unit 1
1. Explain how the fundamental economic problem affects your family and consider how
opportunity cost can be applied to the problem of resource allocation.
2. Explain how capital and labour are needed for the manufacture of cotton garments and consider
how an entrepreneur responds to an increase in demand for these garments.
3. Compare the ways in which resources are allocated in a market economy and in a mixed
economy and consider in which type of economy consumers' needs are best provided for.
4. Explain how an economy moves from a planned to a mixed economy and consider whether this
can only succeed with enterprise.
5. With the help of a production possibility diagram, explain how governments face increasing
opportunity cost when deciding how to allocate resources and consider if the opportunity cost
involved is ever zero.
6. A middle-income country increases its expenditure on capital goods, with no increase in
expenditure on consumer goods.
With the help of a diagram, explain how this affects the country's production possibility curve
and consider whether producers or consumers will benefit most from the change. (Textbook)
7. Explain why demerit goods are only provided by the private sector and consider whether the
private sector alone should provide merit goods.
8. Explain the characteristics of pure public goods and consider why some goods are classified as
quasi-public goods.
9. A public good has the characteristics of non-excludable and non-rival. Explain how these
characteristics can be applied to the provision of flood defences and consider which of the
characteristics is most important. (Textbook)
10. Explain why higher education is a merit good and consider whether in a free market the price
charged reflects the true value to higher education students.
Unit 2
11. *’A free market price operates as a rationing and allocating mechanism.’ Explain how it does
this. 2010S, P1, Q3(a)
12. Explain the factors that are likely to determine the demand for holidays by international tourists
to an exotic island such as Mauritius and consider which of these factors is likely to be most
important.
13. Explain the factors that can affect the price elasticity of demand for a product and consider
which of these is most important.
14. Explain the factors that might affect the price elasticity of supply of goods from a garment
producer in Bangladesh and consider which factors are the most important.
15. A recent television programme in the UK claimed that fresh and ground turmeric was a new
'super food' that may provide relief from a wide range of medical problems, including
depression and anxiety.
With the help of a diagram, analyse how the claim is likely to have affected the market for
turmeric and consider how certain you might be about the market outcome.
16. Many governments have introduced 'sugar taxes' in order to restrict consumption of soft drinks
and other products containing high amounts of sugar.
With the help of a diagram, explain the effects on the market of a new specific tax on sugar and
consider whether an ad valorem tax would be more suitable.
17. Explain how consumer surplus is affected by an increase in the price of a good and consider
whether imposing a new indirect tax increases or reduces consumer surplus.
18. With the help of a diagram, explain what happens to consumer surplus when the price of a
product increases and consider how this might occur in a market of your choice (Textbook)
19. Explain the difference between an inferior good and a necessity and consider whether this
difference is clear. (Textbook)
Unit 3
20. Explain the difference between private goods and merit goods, and consider why a government
only intervenes in the case of merit goods.
21. Using examples from your own country or one that is known to you, explain why governments
find it necessary to provide merit goods and consider why such a policy may not be successful.
(Textbook)
22. In April 2018, South Africa became the latest of a growing list of countries to introduce a sugar
tax on cans of soft drinks. Other countries have rejected such taxes.
Explain how the sugar tax is likely to affect the market for cans of soft drinks in South Africa
and consider how the tax might be most effective.
23. Explain which types of tax might improve the distribution of income in a country and consider
one tax that can be most easily applied in a lower middle-income country.
Unit 4
24. Explain one way gross domestic product (GDP) is calculated and consider whether the
estimates are likely to be more accurate in a high-income country than in a lower-income
country.
25. Explain the main influences on the components of aggregate demand and consider which
component is likely to change the most from one year to another year. (Textbook)
26. With the help of a diagram, explain the circular flow of income
countries have similar leakages and injections. (Textbook)
and
consider whether all
27. Analyse how a sudden decrease in the number of international tourists leads to disequilibrium
in the circular flow of income in an economy and consider how a decrease could be avoided.
28. Explain the impact on aggregate supply of a reduction in taxes on firms and consider why there
may not be an increase in real output.
29. Discuss whether an increase in long-run aggregate supply is likely to be beneficial for an
economy.
30. Explain how a production possibility curve can be used to show how an economy can both
develop and grow, and consider whether economic development or economic growth is likely to
be more beneficial to the economy's population.
31. Explain the main causes of inflation in a country you have studied and consider which of these
causes is the most important at the present time.
32. Discuss the consequences of a sharp, unexpected increase in the rate of inflation in a lower
middle-income country and whether consumers, producers or governments will be most
affected by this increase
Unit 5
33. Explain why a government may experience a budget surplus and consider whether an increase
in a budget surplus is likely to be harmful for an economy (Textbook)
34. Explain why an increasing number of governments have set an inflation target and consider
whether this is a realistic macroeconomic policy objective.
35. A government decides to double its expenditure on its country's infrastructure. With the help of
aggregate demand and supply analysis, discuss whether this will be beneficial for its economy.
36. Explain how monetary policy could be used to counteract a period of deflation and consider
whether this policy is likely to be successful.
37. Discuss whether monetary policy is the best way for a government of a middle-income country
to correct inflation.
38. Discuss how an increase in the interest rate is likely to affect aggregate demand and supply and
discuss why the effects may not always be certain.
39. Explain what may cause an increase in the long-run aggregate supply in an economy and
discuss why this increase is not always beneficial.
40. Explain the main causes of an increase in an economy's productive capacity and consider
whether it will always increase a country's real GDP. (Textbook)
Unit 6
41. Explain the benefits of free trade as suggested by the principle of comparative advantage and
consider whether these benefits can be identified in the real world.
42. Explain the advantages a country may gain from engaging in international trade and consider
the extent to which the theory of comparative advantage explains the pattern of international
trade. (Textbook)
43. Discuss the effects of a change in the domestic price level and an economy's exchange rate on
the terms of trade
44. Explain the difference between a tariff and a quota and consider which is best used by a highincome country.
45. Explain the difference between an import tariff and an import quota and consider which would
be more effective in reducing imports. (Textbook)
46. Consider whether a persistent surplus in the current account of the balance of payments is good
for an economy and consider the benefits from an appreciation [12]
47. Explain why many low-income countries have imbalances in the current account of the balance
of payments and consider the most likely reason for these imbalances.
48. Explain how a depreciation of the exchange rate can cause cost-push and demand-pull inflation
and consider which is likely to be most damaging to the economy.
49. Discuss whether an appreciation of the exchange rate will always lead to a reduction in a
current account surplus on the balance of payments.
50. Discuss how supply-side policies can be used to reduce a deficit on the current account of the
balance of payments.
AS Essay Questions Practice - 12 marks
Unit 1
1. Discuss whether it is likely that economies that have an increase in labour and a high rate of
technological innovation will come nearer to solving the economic problem. [12] 2016W, P23,
Q3 (b)
2. Discuss whether an outward shift in a country’s production possibility curve will always raise
the welfare of the citizens of that country. [12] 2014W, P2,3 Q2 (b)
3. Discuss whether enterprise is crucial to the outward shift of the production possibility curve in a
mixed economy. [12] 2018W, P21, Q2(a)
4. Discuss whether entrepreneurs or governments are more likely to cause economic growth in a
mixed economy. [12] 2015S, P21, 3 (b)
5. Discuss whether resources are more effectively allocated in a planned economy or in a market
economy. [12] 2017S, P23, Q3 (b).
6. Discuss whether an outward shift in an economy’s production possibility curve is more likely to
occur in a free market economy or a centrally planned economy. [12] 2015W, P23, Q2 (b)
7. Discuss what the most significant issues of transition are that a country will face as it moves
from a planned economy to a mixed economy. [12] 2019S, P21, Q2 (b)
Unit 2
8. Discuss the policies that businesses might adopt to maintain sales when incomes are falling and
consider which is most likely to be successful. [12] 2015W, P21, Q2 (b)
9. Analyse the likely effects on the global price of chocolate of the reported changes in 2015.
Discuss the most effective way that the price of chocolate might be stabilised. [12] 2018S, P23,
Q3 (b)
10. Discuss how habit-forming demerit goods and goods with lots of substitutes are each likely to
respond to price rises, and consider the extent to which knowledge of their likely response
would be useful to government policymakers. [12] 2016W, P22, Q2 (b)
11. Discuss which measure of the different types of elasticity of demand is most useful for a
business when setting the price for its product. [12] 2017S, P22, Q3 (b)
12. Discuss the extent to which knowledge of a product’s cross-elasticity of demand is likely to be
important to a firm supplying that product. [12] 2018S, P21, Q3 (b)
13. Discuss if it is more useful for governments to have knowledge of the price elasticity of demand
or the income elasticity of demand for certain products. [12] 2017W, P23, Q2 (b)
14. Discuss whether decisions made by a business are more likely to be influenced by knowledge of
the price elasticity of demand of its product or by knowledge of the price elasticity of supply of
its product [12] 2021W, P21, Q3 (b)
15. Discuss the policies that a government might adopt to increase the price elasticity of supply of
agricultural goods in an economy and consider which policy is likely to be most effective. [12]
2016W, P22 Q3 (b)
Unit 3
16. Discuss how the imposition of an indirect tax on a product will affect consumers, the
government and producers. Assess whether it will have an overall beneficial effect. [12] 2017W,
P21 Q3 (b)
17. ‘Indirect taxes reduce consumer surplus and should therefore never be imposed in a mixed
economy.’ Discuss this view. [12] 2018S, P22, Q3 (b)
18. Discuss whether subsidies on the production of all types of good will lead to an improved
allocation of resources. [12] 2019S, P22, Q3 (b)
19. Discuss whether attempts to help poorer consumers through the introduction of a maximum
price for necessities can ever be successful. [12] 2016S, P21, Q2 (b)
20. Discuss why merit goods may be under-consumed in a mixed economy. Consider whether
maximum prices or education campaigns would be more effective in ensuring that these goods
are supplied in appropriate quantities. [12] 2017M, P22, Q2 (b)
21. Discuss whether subsidies or improved information is the more effective policy to deal with the
problems raised by the under-consumption of merit goods. [12] 2016W, P23, Q2 (b)
22. Discuss whether it is better to impose an indirect tax or conduct an awareness campaign to deal
with the problem of demerit goods such as alcohol. [12] 2017S, P21, Q2 (b)
23. Discuss whether subsidies or improved information is the more effective policy to deal with the
problems raised by the under-consumption of merit goods. [12] 2016W, P23, Q2 (b)
24. Discuss the ways in which a government can redistribute income in a lower middle-income
country. [12] (Textbook)
Unit 4
25. Analyse the causes of an increase in aggregate supply. Discuss the extent to which this might be
beneficial for an economy. [12] 2018W, P23, Q4 (b)
26. Discuss the factors that determine how much an increase in aggregate demand will affect prices,
employment and the balance of payments of an economy. [12] 2016W, P21, Q3 (b)
27. Discuss the causes of an increase in aggregate demand. Assess whether such an increase will
always cause inflation. Use diagrams to support your answer. [12]. 2017W, P21, Q4(b)
28. Discuss the most serious problems faced by an economy with a high and increasing rate of
inflation. [12] 2019S, P23, Q3(a)
29. Discuss the impact of a high rate of inflation on the consumers and producers in an economy
and assess whether consumers or producers would suffer more. [12] 2015S, P23, Q4 (b)
30. Discuss whether deflation is more of a problem in an economy than inflation. [12] 2019S, P21 ,
Q4 (a)
31. Compare two policies that may be considered to solve the problem of demand-pull inflation and
evaluate which is likely to be the more effective. [12] 2016M, P22, Q4 (b)
32. Discuss whether a country with an unemployment rate of 3% has a better macroeconomic
performance than one with an unemployment rate of 8%. (Textbook)
33. Discuss what impact an increase in unemployment is likely to have on an economy. [13]
2017W, P43, 5 (b)
34. Explain how GDP is calculated and show how GDP at market prices is different from net
national income at factor cost (basic prices). [12] 2015S, P41, Q7 (a)
Unit 5
35. Discuss whether supply-side policy is more likely to be successful than fiscal policy when an
economy is faced with inflation. [12] 2017S, P22, Q4 (a)
36. Discuss whether monetary policy alone is the best way for a government to correct inflation.
[12] 2018S, P23, Q4 (a)
37. Discuss the use of supply-side policy as a means of solving the problem of inflation. Consider
whether this policy is likely to be effective. [12] 2017S, P21, Q4 (a)
38. Analyse how fiscal policy and monetary policy could be used to solve the problem of deflation.
Assess which policy is likely to be more effective. [12] 2018W, P22, Q3 (b)
39. Discuss whether supply-side policies are likely to be effective in increasing employment in an
economy. [12] 2019W, P21, Q4 (b)
Unit 6
40. Discuss whether protectionism can reduce unemployment. (Textbook)
41. Discuss whether the case for protectionism in international trade can ever be justified.
(Workbook)
42. Discuss whether a surplus on the current account of the balance of payments will benefit an
economy. (Textbook)
43. Discuss how supply-side policies can be used to reduce a deficit on the current account of the
balance of payments (Workbook)
44. Discuss whether a current account deficit is always a serious economic problem for a country.
[12] 2010S, P21, Q4(b)
45. Discuss the arguments that are used to justify protectionism and consider whether these
arguments can ever be justified. [12] 2019S, P22, P4(b)
46. Discuss, with examples, how international trade protection may affect consumers and producers
in an economy and whether on balance protection can be justified. [12] 2013S, P22, Q4(b)