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Edexcel A-Level Economics AS 2.3.3 Aggregate Supply As Questions

Practise distinguishing AS movements and shifts, drawing SRAS and LRAS changes, and analysing how cost, productivity and migration evidence affects output and prices.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
AS

Exam points

  • distinguish a price-level movement along AS from a cost, tax or exchange-rate shift
  • draw SRAS shifts from oil, gas, coal or import-cost changes and label output and price effects
  • analyse imported-cost shocks through SRAS, AD, real GDP, inflation and the trade balance
  • evaluate energy-price effects using importer/exporter status, duration, spare capacity and structure
  • compare Keynesian and classical LRAS at spare capacity and full-employment output

Covered syllabus points

2.3.3.1a - concept of AS. characteristics2.3.3.1b - AS curve. of AS2.3.3.1c - distinction between a movement along and a shift of the AS curve2.3.3.2a - Factors influencing SRAS. Changes in: (SRAS) • costs of raw materials and energy •2.3.3.3a - Different shapes of AS curve: (LRAS) • Keynesian • classical2.3.3.3b - Factors influencing LRAS. Changes in: • the state of technology • productivity •

Question 1

[Maximum number: 1]

Which one of the following will result in a movement along the AS curve?

A

An increase in the cost of raw materials

B

A decrease in the cost of energy

C

An increase in the price level

D

A decrease in the rate of indirect tax

Question 2

[Maximum number: 4]

Between January 2014 and September 2020 the price of natural gas fell from $ 5.60 per cubic foot to $ 1.66 per cubic foot. Natural gas is an important source of energy for Japanese producers.

Draw a SRAS and AD diagram to show the effect of the decrease in the price of natural gas on the price level and real output for Japan.

Question 3

[Maximum number: 1]

Which statement about the Keynesian LRAS curve is correct?

A

Perfectly inelastic at full employment

B

Relatively elastic at full employment

C

Relatively inelastic with spare capacity

D

Perfectly inelastic with spare capacity

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