Specification point 1.2.10 · Theme 1
How markets work · Introduction to markets and market failure
Questions tagged to this specification point
12 questions
Long-form evaluation and discussion
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Questions built around exam extracts
Case study · Digital markets
With reference to the information provided, discuss whether the price elasticity of demand for video games is elastic or inelastic.
Case study · The cost of living in the UK
Explain one reason why consumers buy less than the social optimum quantity of healthy food.
Case study · The market for meat and the growth of vegetarianism
With reference to the information provided and your own knowledge, assess the view that consumers switching to meat-substitute products is an example of rational behaviour.
Case study · The market for plastic in the UK
With reference to Extract A and your own knowledge, assess the view that it is irrational to buy plastic carrier bags when shopping.
Case study · The market for plastic in the UK
With reference to Extract C, explain how incentives to use reusable coffee cups may lead to a fall in demand for single-use cups.
Case study · The UK online streaming services market
With reference to the information provided, assess whether Netflix subscribers behave rationally.
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Case study · The market for fish
Assess whether it is rational for fishing companies to behave in this way.
Case study · Energy and telecommunication markets in the UK
With reference to Extract C, assess possible reasons why many ‘landline-only’ customers do not switch to a cheaper telephone provider.
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Case study · Energy markets
With reference to Extract B, explain two likely reasons why many consumers of energy have not switched to suppliers offering lower prices.
Case study · Supermarket price war, food waste and possible mergers
Assess the extent to which ‘information gaps’ (Extract B, lines 5 and 6) and ‘irrational behaviour’ (Extract B, line 11) are the main causes of food waste in the UK.
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Case study · The market for cigarettes
With reference to the information provided and your own knowledge, assess the view that tobacco consumers switching to e-cigarettes is an example of rational behaviour.
Focused calculations, explanations and diagrams
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Quick checks of economic understanding
In September 2022, the online retailer, Amazon, increased the price of its Prime service from £7.99 a month to £8.99. As a result, almost 600 000 people cancelled their subscriptions. Which one of the following is the most likely explanation of this behaviour? These consumers: