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A Level H1 Economics Practice Paper 2

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Questions

TuitionGoWhere Practice Paper - Economics H1 A-Level (Version 2)

School: TuitionGoWhere Exam Practice (AI)
Subject: Economics H1
Level: A-Level
Paper: Practice Paper 1 (Case Study Based)
Version: 2 of 5
Duration: 1 hour 30 minutes
Total Marks: 60
Name: ______________________
Class: ______________________
Date: ______________________

Instructions:

This paper contains two case studies with data-response questions.
Answer all questions.
Use an approved calculator.
Show your workings where applicable.
Case Study 1 carries 30 marks; Case Study 2 carries 30 marks.

Case Study 1: Small State Employment and Training (30 marks)

The following data refer to the fictional economy of Littoria from 2019 to 2023.

Table 1.1: Littoria Key Indicators

Year	Unemployment Rate (%)	Govt Training Spending ($m)	Youth Unemployment (%)	Real GDP Growth (%)
2019	4.1	120	8.2	3.0
2020	6.8	210	13.5	-2.1
2021	5.2	240	10.1	2.4
2022	4.0	250	7.8	3.6
2023	3.5	260	6.9	4.0

Extract 1.1:
The government of Littoria introduced a subsidised training programme for youth in 2020. The scheme aimed to reduce youth unemployment by improving skills matching. By 2023, youth unemployment fell by 1.3 percentage points from 2022.

Extract 1.2:
Economists noted that the PPC of Littoria shifted outward after 2021 due to a more skilled workforce, though short-run unemployment remained above the natural rate in 2020–2021.

Section A: Data Interpretation (12 marks)

1. With reference to Table 1.1, compare the unemployment rate and youth unemployment rate in Littoria from 2019 to 2023. [2]

2. Describe the trend in real GDP growth in Littoria from 2020 to 2023. [2]

3. Using Table 1.1, compare government training spending between 2019 and 2023. [2]

4. With reference to Extract 1.1, explain the change in youth unemployment from 2022 to 2023. [2]

5. Using Table 1.1, compare real GDP growth in 2020 and 2023. [2]

6. Describe the trend in government training spending from 2019 to 2023. [2]

Section B: Diagram and Concept Application (10 marks)

7. With reference to Extract 1.2, explain how the PPC of Littoria changed after 2021. Use a PPC diagram in your answer. [4]

Diagram for Q7 (ALEVEL Economics H1)

Generated diagram for Q7.

8. Explain whether the data in Table 1.1 suggests Littoria experienced a recession in 2020. [3]

9. With reference to Extract 1.1 and Table 1.1, explain one possible reason why overall unemployment fell faster than youth unemployment over the period. [3]

Section C: Evaluation (8 marks)

10. Discuss whether the training programme was effective in improving Littoria's standard of living by 2023. [8]

Case Study 2: Regional Food Price Shocks (30 marks)

The following data refer to two economies, Rena and Sora, over 2018–2022.

Table 2.1: Food Price Index and Related Data

Year	Rena Food Price Index (2018=100)	Sora Food Price Index (2018=100)	Rena PED for Food (est.)	Sora Govt Subsidy on Food ($m)
2018	100	100	-0.4	50
2019	108	105	-0.4	60
2020	115	110	-0.4	75
2021	122	118	-0.4	90
2022	130	125	-0.4	110

Extract 2.1:
Rena's food prices rose steadily due to supply chain disruptions. Sora implemented increasing food subsidies to cushion households. Rena's PED for food is estimated at -0.4, indicating inelastic demand.

Extract 2.2:
Sora's subsidy reduced effective prices paid by consumers but increased government expenditure. By 2022, Sora's food price index was lower than Rena's by 5 points.

Section A: Data Interpretation (12 marks)

11. With reference to Table 2.1, compare the food price index of Rena and Sora from 2018 to 2022. [2]

12. Describe the trend in Sora's government subsidy on food from 2018 to 2022. [2]

13. Using Table 2.1, compare the food price index increase in Rena and Sora between 2018 and 2022. [2]

14. With reference to Extract 2.1, explain the estimated PED value for food in Rena. [2]

15. Using Table 2.1, compare Rena's food price index in 2022 with Sora's. [2]

16. Describe the trend in Rena's food price index from 2018 to 2022. [2]

Section B: Diagram and Policy (10 marks)

17. With reference to Extract 2.2 and Table 2.1, explain how a subsidy on food affects the market equilibrium in Sora using a demand-supply diagram. [4]

Diagram for Q17 (ALEVEL Economics H1)

Generated diagram for Q17.

18. Explain the likely PES for food in Rena given supply chain disruptions. [3]

19. Using Extract 2.1, explain why total consumer expenditure on food in Rena likely rose from 2018 to 2022. [3]

Section C: Evaluation (8 marks)

20. Discuss whether Sora's subsidy policy was more effective than Rena's non-intervention in protecting living standards from 2018 to 2022. [8]

End of Paper

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Answers

TuitionGoWhere Practice Paper - Economics H1 A-Level (Version 2) Answer Key

Total Marks: 60
Case Study 1: 30 marks
Case Study 2: 30 marks

Case Study 1 Answers

Q1. [2 marks]
Compare unemployment and youth unemployment 2019–2023 from Table 1.1.

Both rates fell over the period: overall from 4.1% to 3.5%; youth from 8.2% to 6.9%. [1]
Youth unemployment was consistently about double the overall rate, but the gap narrowed by 2023. [1]
Marking: 1 for each correct comparative observation with reference to table.

Q2. [2 marks]
Trend in real GDP growth 2020–2023:

After contracting by 2.1% in 2020, growth turned positive in 2021 (2.4%) and accelerated to 3.6% (2022) and 4.0% (2023). [1 for direction + turning point, 1 for acceleration note]

Q3. [2 marks]
Govt training spending 2019 vs 2023:

Rose from $120m to$ 260m, more than doubling. [1]
Increase was sharpest in 2020–2021 during high unemployment. [1]

Q4. [2 marks]
Extract 1.1: youth unemployment fell 1.3 pts from 2022 to 2023 (7.8% to 6.9%).

Due to subsidised training improving skills matching. [1]
Programme effect compounded by general recovery. [1]

Q5. [2 marks]
Real GDP growth 2020 (-2.1%) vs 2023 (4.0%):

Contrast: negative recession to strong positive. [1]
Difference of 6.1 percentage points. [1]

Q6. [2 marks]
Training spending trend:

Increased every year from $120m to$ 260m. [1]
Largest jump 2019→2020 ($90m) when unemployment peaked. [1]

Q7. [4 marks] PPC outward shift.

Extract 1.2 states PPC shifted outward after 2021 due to skilled workforce. [1]
Diagram: original concave PPC, new PPC outside/right. [1]
Outward shift = increase in productive capacity from human capital. [1]
Does not mean full employment (still short-run unemployment above natural rate 2020–21). [1]
Teaching: PPC shows max combo of 2 goods; outward shift = growth.

Q8. [3 marks] Recession in 2020?

Yes: real GDP growth was -2.1% in 2020 (Table). [1]
Recession = negative GDP growth / falling output. [1]
Unemployment rose to 6.8%, confirming demand fall. [1]

Q9. [3 marks] Why overall fell faster than youth:

Youth need skills; training takes time (Extract 1.1). [1]
Non-youth jobs recovered quicker as economy opened. [1]
Table: youth unemp 13.5% (2020) to 6.9% (2023) vs overall 6.8% to 3.5%. [1]

Q10. [8 marks] Discuss training effectiveness on living standards.
AO4 evaluation expected.
Content points:

For: youth unemp fell, GDP grew, skills raise productivity (Extract 1.2). [2]
Against: spending rose to $260m; short-run unemployment still > natural 2020–21. [2]
Living standards: material via GDP, but equity via youth gap remaining. [2]
Conclusion: effective by 2023 but costly; trade-off with fiscal space. [2]
Marking descriptors: identify (2), explain (2), evaluate trade-offs (2), conclusion (2).

Case Study 2 Answers

Q11. [2 marks]
Rena vs Sora food index 2018–2022:

Both rose (Rena 100→130, Sora 100→125). [1]
Rena rose faster; by 2022 Rena 5 pts above Sora (Extract 2.2). [1]

Q12. [2 marks]
Sora subsidy trend:

Increased from $50m to$ 110m every year. [1]
More than doubled, steepest rise 2020–2022. [1]

Q13. [2 marks]
Increase 2018–2022: Rena +30 pts, Sora +25 pts.

Rena increase larger by 5 pts. [1]
Both upward, Rena steeper. [1]

Q14. [2 marks]
PED = -0.4:

Inelastic (|0.4|<1); quantity demanded changes less than price. [1]
Food is necessity, few substitutes (Extract 2.1). [1]

Q15. [2 marks]
2022: Rena 130, Sora 125.

Rena higher by 5 points. [1]
Matches Extract 2.2. [1]

Q16. [2 marks]
Rena index trend:

Steady rise 100→130, ~6–8 pts/yr. [1]
No fall; supply disruptions (Extract 2.1). [1]

Q17. [4 marks] Subsidy effect via D-S diagram.

Subsidy lowers producer cost → S shifts right S1 to S2. [1]
Equilibrium price falls P1→P2, quantity rises Q1→Q2. [1]
Consumers pay less (Extract 2.2). [1]
Govt spends subsidy (Table Sora $110m 2022). [1]
Diagram must show right-shifted S, lower P, higher Q.

Q18. [3 marks] PES for Rena food:

Likely inelastic short-run due to supply chain disruptions. [1]
Farming/imports need time to adjust. [1]
Long-run more elastic if investment made. [1]

Q19. [3 marks] Rena expenditure rose:

PED inelastic (-0.4), price rose 30%. [1]
%Qd fall < %P rise, so total spending = P×Q rises. [1]
Table shows index up; spending up despite slight volume drop. [1]

Q20. [8 marks] Discuss subsidy vs non-intervention.

For Sora: lower prices, index 5 pts lower, protects households. [2]
Against: fiscal cost $110m, possible inefficiency. [2]
Rena: no cost but higher prices hurt living standards. [2]
Conclusion: Sora more effective for equity, but sustainability unknown. [2]
AO4: trade-off, assumptions, unintended consequences.