Common questions for unit 1 economics edexcel

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Revision of common questions for unit 1
The housing market
inelastic in SR due to the time needed to build etc
LR more elastic BUT depends on how much land is available rural vs. urban
Rented vs. owner occupied accommodation as substitutes
YES; choose
NO; financial situation decides for you, wouldn't everyone rather own their homes then rent
them?- rent is undesirable
Comparisons of house prices between regions
Determined by various factors
Availability of land urban vs. rural
Cost of living in regions
Labour market immobility in the city
Leads to shortage of key workers like teachers and nurses in the city
Too expensive to live in certain areas
External costs arise from the construction of homes
E.g. pollution, devaluation of others homes
inelastic in SR due to low capacity, under investment, low resource supply etc
LR more elastic due to investment, new resources being found etc.
Impact of rising commodity prices
Hard to budget if unstable prices
Buy less
Negative if demand is inelastic
greater subsidies
introduction of minimum guaranteed price
Effectiveness of buffer stock schemes
YES: stable p, if Y is stabilised= more investment-= more supply= cheaper prices
NO: how much is invested back into the industry, costly to gov, if sell excess overseas is bad
for poor farmers who are unable to compete

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Impact of rising tuition fees
Less competitive internationally in regards to the price of education
Less people go= merit good= market failure
More debt to pay off after earning a salary
More serious degrees e.g. science vs. make up degrees
Benefits: LR able to get a highly paid job, more productive = shift in PPF
Negatives: opportunity cost e.g.…read more


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