Page 3 continues Question 1 with part (c), which asks students to explain one factor determining the price elasticity of supply for new house builds.

Example: A suggested answer mentions the stock of components, stating that a high existing stock of materials like bricks allows houses to be built faster, making supply more elastic.

This question tests students' understanding of supply elasticity in a real-world context, aligning with the Edexcel A Level Economics Paper 1 2019 focus on applied economic analysis.

Page 5 continues Question 2 with part (b), asking students to identify which production possibility frontier (PPF) diagram best illustrates the impact of a natural disaster like Hurricane Harvey on the US economy.

Definition: A production possibility frontier shows the maximum possible output combinations of two goods an economy can produce with its available resources and technology.

This question assesses students' understanding of how external shocks can affect an economy's productive capacity, a concept frequently examined in Edexcel A Level Economics past papers 2023.

Page 6 introduces Question 3, focusing on the UK hair and beauty salon industry as an example of monopolistic competition.

Part (a) asks students to identify the characteristic of monopolistic competition that applies to this industry.

Vocabulary: Monopolistic competition is a market structure characterized by many firms selling differentiated products with low barriers to entry and exit.

Part (b) requires students to draw a cost and revenue diagram showing the long-run equilibrium of a firm in monopolistic competition. This tests students' ability to graphically represent complex economic concepts, a skill often assessed in Edexcel AS-level Economics past papers Paper 1.