Edexcel A Level Microeconomics EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) Factors influencing demand for labour - Correct Answers ✅Demand for final product - if rise in output > increase in productivity Relative productivity of labour to capital - substitution effect £3,000 subsidy for hiring unemployed 18-24 y.o. = half UK's youth minimum wage Factors influencing supply of labour - Correct Answers ✅Cost of living Cost of gaining skills UK uni fees capped at £9,250 per year Number of workers UK raises state pension age from 67 to 68 Market failures in labour markets - Correct Answers ✅Geographical immobility - inability of labour to move from one location to another Occupational immobility - inability of labour to move form one industry to another 1 / 4
Edexcel A Level Microeconomics EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) Employer monopsony -> wage-setting power -> wage lower than equilibrium 10% decline in real wages of NHS worker since start of recession Solutions to market failures in labour market - Correct Answers ✅Education and training Housing market reform Wage-setting UK raises NMW from £7.50 to £7.83 Evaluate solutions to market failures in labour market - Correct Answers ✅If increases elasticity of S(labour) -> lower wages If D(labour) if elastic -> min wage will increase unemployment Explain wage determination in competitive labour market - Correct Answers ✅Firms are wage takers -> set W where S
= D 2 / 4
Edexcel A Level Microeconomics EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) S(labour) is perfectly elastic -> AC = MC -> max profits at MRP = MC -> employ Q₁ Positive statement (def.) - Correct Answers ✅Evidence based statement which can be proven true or false Normative statement (def.) - Correct Answers ✅Value judgment which cannot be tested Scarcity (def.) - Correct Answers ✅Lack of resources to fulfil everyone's wants and needs Renewable resources (def.) - Correct Answers ✅Resources which can be replenished over time Non-renewable resources (def.) - Correct Answers ✅Resources which cannot be replenished once they are used PPF (def.) - Correct Answers ✅Max amount of two goods that can possibly be produced in economy with given set of resources, time and technology Capital goods (def.) - Correct Answers ✅Useful not in themselves but for goods and services they can help produce in future 3 / 4
Edexcel A Level Microeconomics EXAM
QUESTIONS AND ANSWERS 100%
SOLVED (Newest 2025) Opportunity cost (def.) - Correct Answers ✅Value of next best alternative forgone Pareto efficiency (def.) - Correct Answers ✅State of allocation of resources in which it is impossible to make any one party better off without making at least one party worse off Allocative efficiency (def.) - Correct Answers ✅When value consumers place on good or service (reflected in price) = cost of resources used up in production Specialisation (def.) - Correct Answers ✅When worker concentrates on performing specific task or narrow range of tasks in production process Division of labour (def.) - Correct Answers ✅Separation of production process into individual tasks Advantages of specialisation (micro) - Correct Answers ✅Workers gain skills in narrow range of tasks -> higher productivity
- / 4