Edexcel A-level Economics (A) 2022 paper 1 predictions

Hi,

Since paper 1 for edexcel econ is this coming Monday, what are the predicted questions that people think might come up, and any other predicted info such as extracts and whatnot

Thanks!

I reckon there will be a 25 marker on supply of labour

Do you have any specific industry’s to use for application?

Some 25 marker possibilities I have been planning/researching based on the advanced information:
- assessing contestability in a market of your choice
- government intervention to increase contestability
- government intervention in market structures (oligopoly, monopoly)
- business growth (benefits/drawbacks of different types and maybe government intervention, possibly to what extent is XYZ a constraint on business growth)
- comparing business objectives in different markets - for example evaluate that profit maximisation is the primary objective in an industry of your choice (or specific market structure)
- efficiency - maybe discussing efficiency in different markets like evaluating that a monopoly is always inefficient (can't think of better wording off the top of my head)
- Market structures and their impacts on consumers/suppliers/employees/firms
- Maybe market structure and reasons for non-competitive behaviour but not sure how that would be worded honestly
- And possibly government intervention + externalities
All points above discussing government intervention could consider government failure too

It looks like a lot but many of them link together/overlap significantly - research on one industry area could be applied to lots of different questions!

General application areas that could come up are energy markets, enviromental policies, general policies to reduce externalities, mergers/acquisitions in an industry and almost definitely a reference to oligopolies/monopolies in some form. For the labour market - labour supply factors/immobility is on the advanced information but I don't think it will be a 25 marker as it was already asked in 2019 and 2021 but don't take my word for that

Some 25 marker possibilities I have been planning/researching based on the advanced information:
- assessing contestability in a market of your choice
- government intervention to increase contestability
- government intervention in market structures (oligopoly, monopoly)
- business growth (benefits/drawbacks of different types and maybe government intervention, possibly to what extent is XYZ a constraint on business growth)
- comparing business objectives in different markets - for example evaluate that profit maximisation is the primary objective in an industry of your choice (or specific market structure)
- efficiency - maybe discussing efficiency in different markets like evaluating that a monopoly is always inefficient (can't think of better wording off the top of my head)
- Market structures and their impacts on consumers/suppliers/employees/firms
- Maybe market structure and reasons for non-competitive behaviour but not sure how that would be worded honestly
- And possibly government intervention + externalities
All points above discussing government intervention could consider government failure too

It looks like a lot but many of them link together/overlap significantly - research on one industry area could be applied to lots of different questions!

General application areas that could come up are energy markets, enviromental policies, general policies to reduce externalities, mergers/acquisitions in an industry and almost definitely a reference to oligopolies/monopolies in some form. For the labour market - labour supply factors/immobility is on the advanced information but I don't think it will be a 25 marker as it was already asked in 2019 and 2021 but don't take my word for that

Are you guys revising wage differentials and demand for labour and stuff because it’s not on the advance information but I’m worried it’ll come up ? Wage differential/ MRP diagrams and stuff won’t come up right ?

Idk if this is helpful to you but I attached my micro app research doc - it's quite long though! I barely know any of it tbh I spent too long researching rather than actually revising but oh well
My main industry areas are UK energy, UK supermarkets, UK airlines and some assorted general facts about government intervention/labour market. I also did a bit on the banking industry but I don't think it's included in the document.

hi hi thanks for this btw, when u say market structures do u feel like natural monopoly could be an option? i don't know if they mention enough things about it in the spec for it to be a 25 marker but at the same time the econ spec is broad anyways

I actually did a bit of research on natural monopolies this morning lol. I think I would talk about natural monopolies in a question about business objectives for monopolies.

For example, profit maximisation versus enviromental concerns for UK water as there's lots of information online. Below I made a messy plan of what I would write about (mainly just app not the actual economic theory behind it), apologies if it's sort of unreadable - I am dyslexic
KAA 1 profit maximisation: Thames water profits and dividends (15-19% over 11 years). Greenwich Uni say in last decade the 9 main water companies made £18.8bn post-tax profits, paid out £18.1bn in dividends and estimated that English customers pay in total £2.3bn more a year than if the utility companies had remained under state ownership, monopoly market with extremely high barriers to entry so can charge high prices within reason
EV 1: Long term the level of profit a company can access may reduce - profit maximisation depends on regulatory body Ofwat (RPI-k) and Ofwat attempting to deregulate market Sep 2016 Albion water in Wales example
KAA2: enviromental concerns: Ofwat investigating 5 firms for wastewater treatment in 2022 - could fine up to 10% annual turnover for sewage leakages, March 2017 fine of £20.3M Thames Water after 1.4bn sewage leaks over a number of years. Thames water most heavily fined water company in UK for pollution 2005-13, Government's Storm Overflows Discharge Reduction plan to cut sewage overflow into rivers by 40% by 2040 - likely to increase penalties to meet that target (increasing AC, decreasing investor confidence) - could start profit satisficing to meet enviromental objectives in SR. Waste-water capital investment fallen by 19% in real terms since privatisation
EV2: Fines not large enough incentive to cut enviromental externalities - cost of investment into reducing enviromental policies may be larger than the fine for not doing so - Laffer curve taxation diagram
Conclusion: Profit maximisation likely to be primary objective as firms have been fined for enviromental problems and sewage leaks for decades - however depends on future government/Ofwat regulations+fines on supernormal profit and sewage externalities respectively

what is government intervention in oligopolies? i know for monopolies its like price caps, profit caps, performance targets and quality checks but how does the government intervene in an oligopoly? Any help much appreciated

thats a rlly good plan, with inequalities and laffer tho is that not more macro than micro I always get confused why its mentioned in paper 1 sometimes

what is government intervention in oligopolies? i know for monopolies its like price caps, profit caps, performance targets and quality checks but how does the government intervene in an oligopoly? Any help much appreciated