A Level Economics Sample Questions

The price of eggs increased by up to 20 pence a dozen in Jan 2012.
What is the most likely cause of this rise in price?
a) A scare that eating eggs might be unhealthy
b) A decrease in the price of feed for hens
c) A reduction in tax on eggs
d) New regulations which prevent the intensive farming of egg-laying hens
Answer?
Explanation?

In 2011, the European Commission proposed the removal of all government subsidies to train operating companies. The most likely effect of implementing such a policy would be to
a) decrease external costs from motoring
b) increase the price of train services
c) increase demand for train services
d) decrease air fares in Europe
Answer?
Explanation?

In a free market economy, an example of market failure would occur if
a) external benefits from education provisions are ignored by the price mechanism
b) firms enter a market in response to an increase in demand
c) external costs are internalised by the price mechanism
d) government intervention in healthcare leads to a misallocation of resources
Answer?
Explanation?

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