[AQA] - Economics Unit 1 January 15th - [2013]

I don't agree with a couple answers in the mark scheme.

MC Q2)

Which one of the following is most likely to discourage the growth of a firm?
The existence of:
A) Disecomies of scale at low levels of Output
B) Marketing economies of scale at high levels of Output
C) Large economies of scale at low levels of output
D) Competing firms in the same industry.

Unofficial mark scheme says answer is A, but that would ENCOURAGE not discourage growth of a firm.

I put down C, reason: if there is significant EOS at low output - why would you want to grow?

I don't agree with D, competing firms in an industry won't stop you from attempting to grow, competing firms will only act as a barrier if you wanted to increase your prices (if you want to follow ECON3 chain of reasoning)

Q14: I felt it could be B/D but it just felt too dogmatic like a value judgement. I chose be C, as this felt like a safe positive statement that is fact, as the price provides information to producers + consumers.

Hi, as you grow, you can produce more and so a greater profit and the firm main aim is to make profit, no matter if they are productively efficient. What about monopolies who are not productively efficient who make £50 mil profit compared to a small firm making £1 mil profit, which is productively efficient.

So is 14, D then?

And is 8, B wrong? I put B

I think I did quite well.

20 or more for sure! But for the rest of the paper, not sure if I got the full marks for the 5 marker, the 12 marker I drew a shift in the demand curve instead of just along!! So I would have lost a couple of marks there....(context 2). The last part of the paper I did an okay essay, but the conclusion was a little rushed.

I don't agree with a couple answers in the mark scheme.

MC Q2)

Which one of the following is most likely to discourage the growth of a firm?
The existence of:
A) Disecomies of scale at low levels of Output
B) Marketing economies of scale at high levels of Output
C) Large economies of scale at low levels of output
D) Competing firms in the same industry.

Unofficial mark scheme says answer is A, but that would ENCOURAGE not discourage growth of a firm.

I put down C, reason: if there is significant EOS at low output - why would you want to grow?

I don't agree with D, competing firms in an industry won't stop you from attempting to grow, competing firms will only act as a barrier if you wanted to increase your prices (if you want to follow ECON3 chain of reasoning)

Q14: I felt it could be B/D but it just felt too dogmatic like a value judgement. I chose be C, as this felt like a safe positive statement that is fact, as the price provides information to producers + consumers.

I don't understand - are you asking me or telling me something?! What Q?

Edit, I suspect you were refering to this part of my post...


That was more of a rhetorical question behind why a firm may not increase output when theres significant EOS at low output

True-but they can make even more money if they are at EOS

Hmm...I'm still not sold on Q2

Right, so this is my UNOFFICIAL MARK SCHEME. If you think I got anything wrong, don't hesitate, and correct me.

1. B
2. A
3. B
4. B
5. A
6. D
7. D
8. A
9. C
10. B
11. A
12. A
13. D
14. B
15. B
16. D
17. A
18. A
19. B
20. D
21. B
22. C
23. C
24. B
25. A

Good job on the multiple choice, but I do believe you made one mistake.

Question 19 is supposed to be C, because the opportunity cost of making ONE more car is the same for both, which means one less van.

There was a past paper that had a question comparing two PPF diagrams, and the answer was Y was greater than X or some sort... You might of got the answer confused with that. But gj on a whole.

Weren't the gradients different at different points? Just saying


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Hi, i think the gradients were the same at each point as if you drew lines pointing down from each of the points, and another line at an extra unit, they are the same distance apart and so have the same opportunity cost and so I think the answer was C.

Good job on the multiple choice, but I do believe you made one mistake.

Question 19 is supposed to be C, because the opportunity cost of making ONE more car is the same for both, which means one less van.

There was a past paper that had a question comparing two PPF diagrams, and the answer was Y was greater than X or some sort... You might of got the answer confused with that. But gj on a whole.

No I'm fairly certain the answer was A, the opportunity cost was greater at X than at Y. Because looking at the diagram if you mark on a one unit increase in cars at each point the gradient at X is less than the gradient at Y so more vans are lost.

Yeah I also agree. This is what I mean by different gradients, as it is steeper at different places - thus higher opportunity cost