1 · Scarcity and economic choices
scarcity · opportunity cost
U1-Q1 · 2 marks
What is the opportunity cost of opening the studio?
Answer and reasoning · Respuesta y razonamiento
The useful study time from the rejected study room.
U1-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: A school has one empty room. It can become a music studio or a quiet study room. The choice costs the benefit of the best rejected use, even when no money changes hands.
Answer and reasoning · Respuesta y razonamiento
The school values the study room at 50 useful study hours a week and the studio at 30 rehearsal hours. Choosing the studio sacrifices the study room: its opportunity cost is the 50 study hours, not the sum of both outcomes.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
Do not call every expense an opportunity cost. Identify the next-best alternative and its benefit. / A point inside a boundary may show unemployment or inefficient use, rather than fewer resources.
2 · Markets and elasticity
elasticity · equilibrium
U2-Q1 · 2 marks
Which description fits the café data if other factors stay unchanged?
Answer and reasoning · Respuesta y razonamiento
Demand is price elastic over this change; total revenue falls.
U2-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: A café raises the price of a drink from 10 to 11 yuan and sales fall from 100 to 80 cups. Did customers move along demand, or did their preferences change?
Answer and reasoning · Respuesta y razonamiento
Using initial values, percentage price change is 10% and percentage quantity change is −20%. PED = percentage quantity change percentage price change = −20/10 = −2. Revenue falls from 1,000 to 880 yuan.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
State the percentage-change convention and interpret the magnitude. A negative sign describes the usual inverse relationship. / Do not claim the whole curve has one elasticity, or confuse a change in quantity demanded with a demand shift.
3 · Externalities and intervention
externality · subsidy
U3-Q1 · 2 marks
Why can the delivery market produce too many night journeys?
Answer and reasoning · Respuesta y razonamiento
The firm does not face the full external noise cost in its private decision.
U3-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: A delivery firm saves fuel costs by using noisy scooters late at night. Neighbours lose sleep. The firm's accounts omit a cost borne by people outside the transaction.
Answer and reasoning · Respuesta y razonamiento
A per-journey charge can make the firm face part of the noise cost and reduce night deliveries. A time restriction targets the noise more directly, but may reduce access for customers and needs enforcement.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
A tax does not remove every external cost. Its effect depends on responsiveness, measurement and evasion. / Compare policies against the actual problem, not a claim that all government action succeeds.
4 · Production, costs and growth
productivity · profit
U4-Q1 · 2 marks
What is average total cost at 100 loaves?
Answer and reasoning · Respuesta y razonamiento
5 yuan per loaf.
U4-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: Two bakeries make the same bread, but one trains each worker for a specialist task. Higher output per worker can lower cost, while repetitive work can harm motivation.
Answer and reasoning · Respuesta y razonamiento
A bakery has fixed costs of 200 yuan and variable cost of 3 yuan per loaf. At 100 loaves, total cost = 200 + 3 × 100 = 500 yuan. At 8 yuan per loaf, revenue = 8 × 100 = 800 yuan and profit = 800 − 500 = 300 yuan.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
Economies of scale lower long-run average cost as scale increases; they are not simply a higher total profit. / Coordination problems and slow communication can cause diseconomies in a large business.
5 · Competition and labour
monopoly · labour demand
U5-Q1 · 2 marks
What tends to happen when labour demand rises and labour supply is unchanged?
Answer and reasoning · Respuesta y razonamiento
The market wage tends to rise.
U5-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: A town has one broadband supplier but ten food stalls. Customers' alternatives change each firm's ability to raise its price.
Answer and reasoning · Respuesta y razonamiento
A new employer raises demand for local electricians. With unchanged supply, their wage tends to rise. A training programme can later increase skilled labour supply and reduce shortages.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
A large firm is not automatically a monopoly, and monopoly does not guarantee high profit. / A wage comparison must consider skills, working conditions, hours and institutions, not one cause alone.
6 · Government objectives and policies
inflation · fiscal policy
U6-Q1 · 2 marks
What does a fall in inflation from 8% to 3% usually mean?
Answer and reasoning · Respuesta y razonamiento
The general price level is still rising, but more slowly.
U6-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: Household prices rise while some workers lose jobs. A policy that raises spending may help employment but add pressure to prices.
Answer and reasoning · Respuesta y razonamiento
If nominal GDP rises by 8% while prices rise by 5%, real growth is about 3%. Lower interest rates may raise investment and consumption, but borrowers must be willing and able to respond.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
Slower inflation means prices rise more slowly, not that prices fall. / Judge a policy by time lags, spare capacity, public finances and the source of inflation.
7 · Trade and exchange rates
exchange rate · tariff
U7-Q1 · 2 marks
Which change has occurred in the book example?
Answer and reasoning · Respuesta y razonamiento
The yuan depreciates and the yuan price of the dollar-priced book rises.
U7-Q2 · 4 marks
Explain the mechanism or reasoning in this original case: A student buys a book priced at 20 dollars. The exchange rate changes from 7 to 8 yuan per dollar. The same foreign price now costs more in yuan.
Answer and reasoning · Respuesta y razonamiento
The book cost is 20 × 7 = 140 yuan before, and 20 × 8 = 160 yuan after. The yuan has depreciated against the dollar under this quotation; imported goods become more expensive in yuan.
- Accurate relevant concept (1)
- Specific evidence from the case (1)
- Connected reasoning (2)
Always state the quotation before calling a currency stronger. / Export competitiveness also depends on imported inputs, demand, quality and contracts, so depreciation is not a guaranteed solution.