SIXTH FORM 2020

ECONOMICS
1 hour 30 minutes

Name: …………………………………………..……….……

School: …………………………….……………….….………

Date: …………………………………..………….…………

Instructions to Candidates:

• There are two sections in this paper.

• Answer ALL FOUR questions in Section A and ONE essay question, from a choice of
three, in Section B.
• There may be more space available for your answer than you need
• Allocate approximately 45 minutes to each section of the paper
• The maximum mark for the paper is 100
• Calculators are allowed

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SECTION A

Answer ALL questions in this section.

In 2014 there were over 10 million diesel cars registered on the roads in the UK, up
from just 4 million in 2001. However, in 2019, motor vehicle traders are finding they
are having to discount the asking prices of diesel cars. Although UK consumers like
diesel cars, demand is falling as consumers worry that the cost of owning a diesel
car will be increased by higher taxation in the future. Statistics from The Society of
Motor Manufacturers and Traders (SMMT) shows new diesel car sales were down
19.3 per cent in 2019 while cars with zero emissions were the fastest growing sector
in the car market.

The rise in uncertainty around diesel purchases has harmed car dealers who have
revealed they are struggling to sell diesel vehicles, resulting in falling profits. A
survey revealed fuel type was the second most important consideration for those
looking to purchase a vehicle, behind how much a car costs to buy.

The introduction of the Ultra-Low Emission Zone in London has also seen millions of
pre-2015 diesel owners charged a £12.50 daily fee on top of the existing £11.50
congestion charge to drive in the capital. Politicians also want to bring a ban on the
sale of new petrol and diesel cars in Britain, with MP’s on the Energy and Climate
Change Committee pushing to stop new sales in these markets by 2030.

Electric cars are rising in popularity, supported by a government subsidy. While

electric cars represented 1.3% of new car sales in 2016, disappointingly they still
only represent 1.3% of new car sales in 2019. In London there are plans to
introduce more charging points on the streets in a bid to increase the attractiveness
of electric vehicles.

Of the top 10 selling new cars in the UK, 7 are manufactured overseas, with 3 of the
top 10 manufactured in Germany.

2
1 With the aid of a supply and demand diagram, explain why there have
been recent falls in the price of diesel cars in the market. (10 marks)

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2 Suggest two reasons why electric cars still only represent a very small
percentage of new car sales. (8 marks)

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3 Explain two benefits a country, such as Germany, might experience from
exporting cars to other countries. (16 marks)

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4 Suggest two strategies a UK car retailer could adopt in order to remain
profitable despite falling sales of diesel cars. (16 marks)

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SECTION B

Answer ONE of the questions in this section. Where appropriate, you are
encouraged to refer to an economy that you have studied.

Each question is worth 50 marks.

1 There has been increasing concern surrounding climate change, but no

clear strategy has emerged regarding the best way for governments to
tackle the problem.

Assess whether banning the sale of petrol and diesel cars is likely to be
the most effective strategy for reducing the emission of climate changing
gases.

2 In the 1970s, manufacturing contributed 25% of the UK’s GDP. In 2019

manufacturing provides 11% of UK GDP and 44% of UK exports.

Assess whether having a manufacturing sector is essential for an

economy, if it is to maintain economic growth and living standards.

3 In September 2019 Thomas Cook, one of Europe’s biggest travel groups,

entered compulsory liquidation. The Spanish Confederation of Hotels and
Tourist Accommodation has said that, as a result of the liquidation, 1.3
million autumn and winter visitors will be unable to fly into Spanish
destinations.

Assess at least two strategies that either Spanish hotels or the Spanish
government could pursue in order to minimise the impact of Thomas
Cook’s liquidation on Spanish tourism.

Please tick: Question 1 Question 2 or Question 3

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END OF EXAM

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