9708A. 8 March

1. The diagram shows the demand curve for a product.

What is maximised at X?
A marginal revenue
B total revenue
C marginal utility
D total utility

2. The diagram shows a firm’s cost and revenue curves.

Which features are associated with the diagram?
A economies of scale and allocative efficiency
B interdependence and allocative efficiency
C price rigidity and economies of scale
D price rigidity and interdependence

3. In the year ending July 2016, airline fuel prices fell by 20.4% while the price of passenger aircraft increased by around 1.1%.
Assuming no other changes in the passenger airline industry, what was the outcome for fixed
costs and variable costs?

Fixed costsVariable costs

4. Which feature of production would make it more likely that an industry is a contestable market?
A advertising has established consumer loyalty
B all firms in the industry share research and development
C low fixed costs
D market rivals aim to reduce product differentiation

5. What is an example of backward vertical integration?
A a bakery buying a wheat farm
B a car manufacturer buying a car showroom
C a vineyard buying an apple orchard
D two rival supermarkets joining together


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