2022 A-Levels H2 Economics Question Paper (Predictions)
H2 (Paper 2) Essays Predictions: (Exam Predictions, as of 22 Nov 2021)
Typically, the Microeconomics Section (Section A) is predominantly Micro topics, and should consist of the combination of Market Mechanism, Market Structures and Market Failure. However, Cambridge may choose to mix a few Macro econs concepts in the question. A-Level JC Economics candidates beware!
Q1: Market Mechanism – Application of elasticity concepts and prediction of impacts on the market, likely, changes in price, output or market variables.
Q2: Market Structures – Either on Price Discrimination, Oligopolistic Competition or specific concepts like economies of scale (EOS) or barriers to entry (BTE).
Q3: Market Failure – Either on Externalities, Factor Immobility or Imperfect Information
2022 Predicted Sample Paper 2 JC & A-Level Econs Essay Questions (Section A)
Q1. Despite the exodus of Hong Kong citizens to UK, the prices for private property soar to a 7-month high in 2021. Private property such as condominiums and bungalows are set to soar. Developers are facing the crunch from the greater desire to provide more luxurious finishing and more elaborate showrooms.
(a) Explain possible factors that could affect the rapid rise in the price of private property in HK. [10]
(b) Examine the impact of the above factors on the markets for various types of private property and that for public housing. [15]
Part (a)
Causes and effects (price of private property)
Theory: identify the demand and supply factors
DD: expectation of rise in future prices, incomes, related goods (public housing)
SS: lack of land supply, materials, especially COVID-19 supply crunch.
Application: HK
Part (b)
Key issues: effects on property markets
Evaluation type: effects;
Two sided arguments:
Thesis & Anti-thesis: effects on private property market;
Thesis & Anti-thesis: effects on public housing market;
Judgements: types of houses and government’s intervention!
Theory: DD/SS, elasticity concepts of demand
Applications: Singapore
Q2. Discuss the assertion that monopolistic competition is the more prevalent market structure than oligopoly in an increasingly globalised world.” [25]
Explain characteristics of monopolistic competition and of oligopoly
Two sided arguments:
Thesis: monopolistic competition is more prevalent
Anti-thesis: oligopolistic competition is more prevalent
Evaluation: a mixture in reality; explain the wide U-shaped LRAC with a large range of minimum efficient scale (MES)
Theory: market structure
Applications: Singapore
Q3. Governments provide all public goods supplied but only some of the merit goods supplied.
3(a) Distinguish between public and merit goods and explain how market failure arises in each case,
3(b) Evaluate on how a government might intervene in the provision of these goods?
Part (a):
Attributes
Characteristics => roles of markets => type of failures => roles of government.
Use relevant examples
Part (b):
Key issues: intervention in public goods and merit goods;
Evaluation type: policies;
Two sided arguments:
Thesis: various policies;
Anti-thesis: limitations and appropriateness;
(Note: at least 2 Microeconomic policies)
Judgements: combinations of various policies!
Theory: Market failures (under consumption of merit goods and non provision of public goods)
Applications: Singapore
In the Macroeconomics section (Section B), expect the following:
Q4: One question on domestic economy, economic growth or unemployment, or a combination.
Q5: One question on external economy, exchange rate policy or consequences
Q6: Maybe an additional question on domestic or external economy, or a focus on a specific policy or a set of policies, or even a cross link to Micro Econs.
(Chances are, this question belongs to the Common Last Topics, and is struck off.)
2022 Predicted Sample Paper 2 JC & A-Level Econs Essay Questions (Section B)
Q4. Household spending in Japan rose at the fastest pace in four years in May 2019, in a sign improving domestic demand will offer some support for the Japan economy. A recovery in private consumption is seen as vital in Japan’s fight against deflation.
Q4(a) Explain the possible causes of an increase in autonomous consumption .
Q4(b) Assess the possible impact of an increase in autonomous consumption on the equilibrium level of national output and the general price level in the Japan economy.
Part (a):
Explain the main factors of increase in autonomous consumption (C): rise in wealth and incomes, lower taxes, lower interest rates, expectations of future price changes.
Part (b)
Thesis: increase in C raises the equilibrium level of national output and the general price level (GPL).
Anti-thesis: increase in C may not raise the equilibrium level of national output and the GPL.
Evaluation:
Depends on magnitude of rise in C
Depends on rise in C are mainly from high or low / mid income households. Impact on MPC differs.
Depends if near or at full employment levels.
Depends on consumer confidence.
Conclusion: Not easy for Japan to move out of deflation. Need a fairly large rise in C to experience a positive mild rate of inflation.
Q5. Discuss how far a government’s economic policy options are affected by the country’s national debt. [25]
Explain government budget = Gov revenue – Gov spending (eg of sources or revenue and spending)
If Gov revenue < Gov spending, then budget balance deficit.
If wishes to continue to maintain spending levels, then will have to borrow and thus incur a national / government debt
Thesis: Macroeconomic policy options are affected by the country’s national debt
(namely, expansionary FP and SSP)
Anti-thesis: Microeconomic policy options are affected by the country’s national debt
(namely subsidies for merit goods, externalities, etc.)
EV:
which areas more impacted?
depends on prudence of government, etc.
Conclusion: Macro or Micro economic policy options can be more impacted. It depends on the economic priorities, economics situation, etc.
Q6. A key feature of the Singapore economy is its openness to trade and capital flows.
(a) Explain the main features of small and open economies and how fiscal policy is not very effective to boost the level of economic activity. [10]
(b) Evaluate the assertion that economic policies in Singapore are limited mainly by the price elasticities of demand for exports and imports. [15]
Part (a) Attributes/characteristics
Small domestic market
Large external demand
Open to trade and capital flows
Explain FP, and how Expansionary fiscal policy is not effective in boosting aggregate demand (AD) in Singapore.
Part (b)
Key issue: price elasticity of demand
Evaluation type by policies
Two sided arguments:
Thesis: How PED limit the effectiveness of policies;
Anti-thesis: how other limitations impact policies
Judgment: Types of policies.
Theory: AD/AS, PED, demand side and supply-side polices
Applications: Singapore.
