Posted: September 14th, 2017

Study the graph below and answer the questions which follow.

Study the graph below and answer the questions which follow. Average Public Sector House Rent in Scotland 800 700 600 Rent per 500 month 400 (£) 300 200 100 1 2 Year (a) Describe fully the trend in public sector rent in Scotland between Years 1 and 4. 3 4
3 (b) Calculate the percentage change in average public sector house rent in Scotland between Years 2 and 4. Answer Show your working here.

2 (ii) the price of houses in the private sector.

2 (d) The government is concerned that the changes in public sector house rent shown on the graph may have a severe impact on low income groups. (i) Suggest 3 measures the government might take to attempt to solve this problem apart from lowering the rent. 1

2

3 3 (ii) Choose one of these measures and explain how it would be expected to work.
2. Study the passage below and answer the questions which follow. Economics is the study of how scarce resources can be allocated to attempt to satisfy unlimited needs and wants. Although economic and free goods exist, scarcity means that choices have to be made and so opportunity cost occurs. The most common type of economic system is a mixed economy. (a) Explain, using examples, the difference between needs and wants.

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2 (b) Explain, using an example, what is meant by the term “free goods”.

2 (c) (i) Define the term “mixed economy”.

1 (ii) Explain how resources are allocated in a mixed economy.

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2. (continued) (d) Name 2 other types of economic systems. 1 2 (e) All governments face the problem of scarcity. Suggest and explain one measure a government might take to increase the supply of economic resources.
3. Study the picture below and answer the questions which follow.

(a) (i) Identify from the picture 2 examples of money being used as a standard for deferred payment. 1 2 (ii) What other evidence is there that Wildsports Ltd is trying to attract more customers? 1 2 (b) Suggest and explain one example of backward vertical integration for Wildsports Ltd. 2 2

2 (c) What evidence is there in the picture that Royalscot Bank is a profit maximising organisation?
4. Study the diagrams below and answer the questions which follow.
Diagram 1 The Supply of Cougar Football Boots 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 S S1 S S1 Price (£) 60 50 40 30 20 10 0 100 200 300 400 500 600 700 800 Quantity per month (000s) S 100 200 300 400 500 600 D S Diagram 2 The Demand and Supply of Panther Football Socks D
(a) State the law of demand.

1 (b) What is meant by the economic term “supply”?
4. (continued) Use Diagram 1 to answer this question. (c) The price of Cougar football boots changes from £80 to £90. Using supply curve SS calculate the change in quantity supplied. Answer Show your working here.

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2 (d) Describe 2 possible reasons why the supply curve has shifted from SS to S1S1. 1

2 2 Use Diagram 2 to answer this question. (e) Identify the equilibrium price and quantity of Panther football socks as shown in Diagram 2. 1 (f) What effect might the shift in supply shown in Diagram 1 have on the market for Panther football socks?

5. Study the table below which shows the possible output levels and production costs of 21st Centurion plc which produce Krinkle electronic books. Answer the questions which follow. Fixed Cost (£) ? 10 000 10 000 10 000 10 000 Variable Cost (£) A 5000 7500 9000 12 000 Total Cost (£) 10 000 15 000 17 500 19 000 22 000 Average Cost (£) 0 B 87·50 63·33 55·00

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Output 0 100 200 300 400

(a) Give an example of a variable cost to 21st Centurion plc. 1 (b) Calculate the missing figures: A Show your working here. B

2 (c) Explain the relationship between the fixed costs and output of 21st Centurion plc.

5. (continued) (d) The selling price of a Krinkle is £110. What problem do 21st Centurion plc face at an output level of 100?

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1 (e) The manager of 21st Centurion is considering making production more capital intensive. (i) What is meant by “capital intensive”?

2 (ii) How might the proposed change in (e) (i) affect the average cost of 21st Centurion plc? Tick (3) the correct box. Increase (iii) Justify your answer to (e) (ii). Decrease
6. Study the charts below and answer the questions which follow. Annual UK Public Spending by Category (£ billion) Social Protection 500 Others 100 Environment 50 Defence 200 Income Tax 500 Education 300 Health 350 Corporation Tax 200 Annual UK Tax Receipts by Category (£ billion) VAT 360

Customs and Excise 80 National Insurance 120

(a) Give one economic reason why the UK Government spends money on Social Protection.

1 (b) (i) Give one example of public spending that could be included under the category of “Others”. 1 (ii) Calculate spending on Education as a percentage of total public spending. Answer Show your working here.
Identify which of the following the UK Health Service provides. Tick (3) the correct box. A Public good (ii) Justify your answer to (c) (i). A Merit good

2 (d) Calculate the total UK Government Revenue from direct taxation. Answer Show your working here.

(i) Using both diagrams, what problem does the UK Government face? 1 (ii) Suggest and explain one measure the UK Government might take to solve this problem.

 
7. Study the bar chart below and answer the questions which follow. Employment Figures in Scotopia—Years 1–3 20 18 16 14 12 10 8 6 4 2 Year 1 Year 2 Year 3

Describe fully the trends in male and female employment as shown in the chart.

3 (ii) Suggest 2 economic reasons for the trends in male and female employment identified in (a) (i). 1
Suggest 2 possible actions people seeking employment might take to improve their prospects of employment. 1

2 2 (c) Describe how the UK Government measures unemployment.

2 (d) Describe 2 economic benefits to the UK of more women in employment. 1

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