Extract B (lines 12–14) states that ‘The Universal Postal Service obligations require Royal Mail to deliver letters and parcels to all parts of the country six days a week’. With the help of a monopoly diagram, explain how the Universal Postal Service obligations are likely to affect Royal Mail’s costs and profits. (June 2017)
Extract E (lines 22–23) states that ‘The tendency for women to participate in low-productivity sectors is now a bigger factor in their low pay than discrimination’. With the help of a diagram, explain how the difference between the marginal revenue product of male and female workers might account for the lower average earnings of women. (June 2017)
Extract C (lines 10–11) states that ‘There is ample opportunity for new players to enter the sector.’ With the help of a diagram, explain how the lowering of barriers to entry in the banking market might lead to lower prices and a situation in which banks make normal profit. (June 2018)
Extract E (lines 4–5) claims that workers in the 18th century saw wages rise in line with productivity. With the help of a diagram, explain how advances in modern technology are likely to lead to rising wages in some industries. (June 2018)
Extract B (line 18) states that the global trade in sand has been ‘made possible by cheaper transportation’. With the help of a diagram, explain how cheaper transportation and a construction boom in East Asia have led to growth in the market for sand. (June 2019)
Extract E (lines 10–11) describes the British railway sector as a ‘natural monopoly’, which was split up into ‘no less than 100 pieces’ when it was privatised. With the help of a diagram, explain why breaking up a natural monopoly in rail may affect long-run average costs. (June 2019)
Extract B (lines 8–10) states: ‘many companies intentionally make it difficult to repair their products in order to increase sales. This is both economically inefficient and environmentally foolish; it imposes costs on the environment even though it may make sense for individual companies.’ With the help of a diagram, explain how the production of goods which are designed not to last long may result in market failure. (June 2020)
Extract E (lines 5–7) states: ‘Until the 1990s, almost all workers in the care sector were employed by the government, which acted as a monopsonist by keeping wages low.’ With the help of a diagram, explain how a monopsonistic public sector can lead to low pay for social care work. (June 2020)
Extract B (lines 9–10) states: ‘After the monopoly’s patent expires, other companies can manufacture and market the same drug under its generic name, usually at a lower price.’ With the help of a diagram, explain why prices of pharmaceutical drugs supplied by a monopoly are likely to be higher than in markets which are more competitive. (June 2021)
Extract F (lines 18–19) states: the Government ‘could also take steps to recognise foreign qualifications, thus removing obstacles for well-qualified foreign-born workers.’ With the help of a diagram, explain how UK firms not recognising foreign qualifications may lead to some ethnic groups receiving lower pay. (June 2021)
Extract C (lines 4–5) states that, as a result of trade union action, ‘The hospital trust increased their £8.21 minimum wage to the London Living Wage of £10.75.’ With the help of a diagram, analyse how a trade union might achieve higher pay for its members. (June 2022)
Extract E (lines 16–17) states that, ‘Supermarkets set prices interdependently, and price wars look very likely.’ With the help of a diagram, analyse the impact on grocery consumers of interdependence between supermarkets. (June 2022)
Extract C (lines 3–4) states that ‘the mining, manufacturing and disposal process for batteries could soon become an environmental disaster.’ With the help of a diagram, explain why the production and sale of lithium-ion batteries might lead to market failure. (June 2023)
Extract E (lines 19–20) states that ‘Some out-of-work benefits have not kept up with inflation, putting downward pressure on wages, contributing to the rise in in-work poverty.’ With the help of a diagram, explain how a reduction in out-of-work benefits may lead to lower wages in some labour markets. (June 2023)
Extract B (lines 11–12) states that there is ‘no evidence of collusion between energy suppliers to date.’ With the help of a diagram, explain how collusion between energy suppliers could affect the retail prices paid by consumers. (Specimen)
Extract F (lines 9–10) states that ‘concentrating income in fewer and fewer hands eventually leads to bubble economies in which the prices of assets, such as houses and shares, rise continuously’. With the help of a diagram, explain how growing inequality might lead to a persistent rise in the price of houses. (Specimen)