Practice bank
Every question, cut by section
All 92 questions in this paper in one place, filterable down to a single spec section when you know what you’re bad at — and mixed by default, because the real paper never tells you which section you’re in.
Mode
Every pick reveals its explanation immediately here — right or wrong, and why. Switch to Drill when you want to rehearse the real paper’s pacing instead: a timed countdown, with feedback withheld until the whole set is done.
Pool
From How This Paper Is Marked
Two students are each asked to explain why a firm might satisfice rather than maximise profit. Student A writes: 'Firms may satisfice. Satisficing is when a firm accepts a minimum acceptable level of profit rather than the maximum. This happens because of the divorce of ownership from control.' Student B writes: 'Because ownership and control have separated in a large firm, the manager who actually sets output is not the person who receives the profit — so the manager accepts whatever profit keeps shareholders from intervening, and spends any remaining latitude on their own priorities instead of squeezing out the last possible pound of profit.' Both students state true, relevant economics. Which is more likely to score higher on a levels-based essay, and why?
From Costs
A firm's marginal product of labour is rising. What is happening to its marginal cost?
From Business Growth
A furniture retailer takes over the timber-processing firm that supplies its raw wood. Which type of integration is this, and what does it primarily secure?
From Oligopoly
A smartphone manufacturer responds to a rival's price cut not by lowering its own price, but by launching a major advertising campaign and adding a new camera feature to its flagship phone. What type of competitive response is this?
From Labour Markets
A factory in a well-connected city has several unfilled vacancies for machine operators. In the same city's wider travel-to-work area, there are unemployed workers with exactly the right qualifications and experience for the role — but they live in a different region and are unwilling to relocate because of family commitments. Which type of immobility does this best illustrate? (VERIDIAN-original.)
From Business Objectives
A logistics company's founder-CEO holds 18% of its shares and sits on the board. Its main competitor is run by a professional CEO who holds under 1% of shares and is paid a salary plus an annual bonus tied to total revenue.
Explain, using the principal-agent problem, why the two firms are likely to choose different output levels even if they face identical costs and demand.
From Economies and Diseconomies of Scale
What is minimum efficient scale (MES)?
From Market Structures and Competition
A national grocery-delivery market has five firms with individually-identifiable market shares — Firm A 22%, Firm B 18%, Firm C 15%, Firm D 12%, Firm E 9% — plus a further 24% split across many small local delivery apps too small to rank individually.
What is the four-firm concentration ratio (CR4) for this market? (VERIDIAN-original, same calculation type confirmed across multiple real series.)
From Monopsony
Which of the following is a correct statement about monopsony?
From How This Paper Is Marked
Which job is this sentence doing: 'This unemployment effect is unlikely to hold in a monopsony labour market — there, a minimum wage set at or below the competitive wage can raise both the wage and the level of employment simultaneously, rather than causing job losses'?
From Costs
A firm's supplier raises the price it charges per unit of raw material. Which one of the following correctly describes the effect on the firm's short-run AC and MC curves? (VERIDIAN-original — targets the trap named above: an examiner report found only a small percentage of candidates correctly shifted both curves.)
From Business Growth
Firm A currently holds 18% of a national market. It merges with Firm B, a direct competitor selling the identical product, which holds 12% of the same market. Assuming no change in total market size, what is the combined firm's market share immediately after the merger? (VERIDIAN-original.)
From Monopoly and Contestability
A monopolist faces market demand P = 150 − Q and has constant marginal cost of £30. What price does it charge at its profit-maximising output, and how does this compare with marginal cost?
From Government Intervention
A monopsony employer faces a labour supply curve W = 10 + L and a labour demand curve (MRP_L) of 70 − 2L. At what level of employment does the monopsonist hire?
From Revenue
A firm's marginal revenue is currently negative. What must be true of demand at this output?
From Profits and Losses
A firm's current price is £11 per unit. Its average variable cost at this output is £9, and its average total cost is £13.
Assuming the price stays where it is, what should the firm do in the short run, and what should it plan for the long run? (VERIDIAN-original, same calculation pattern confirmed across the archive.)
From Oligopoly
A firm wants to win market share from a rival without risking a price war. Which of these is a genuine example of achieving that without changing its own price?
From Labour Markets
A small, high-end furniture workshop pays its skilled cabinet-makers wages that account for 78% of its total production costs. Based on this fact alone, is the workshop's demand for cabinet-makers likely to be relatively elastic or inelastic with respect to the wage rate? (VERIDIAN-original, testing the same mechanism as a confirmed real past-paper MCQ pattern — not a reproduction of it.)
From Business Objectives
A firm faces the demand curve P = 100 − 2Q and has constant marginal cost of £20. At which output is total revenue maximised?
From Economies and Diseconomies of Scale
A national government invests heavily in a rail freight network specifically to serve a cluster of car manufacturers in one region. A car manufacturer in that region sees its average costs fall as a result. Which type of economy of scale is this?
From Market Structures and Competition
An industry has four named firms with market shares of 20%, 15%, 10% and 8%, plus a further 47% spread across many small firms grouped together as 'Others.' What is the correct four-firm concentration ratio (CR4)?
From Monopsony
A firm is the only buyer of a raw material from a large number of independent small suppliers. It has no employees relevant to this scenario at all. Is this firm capable of exercising monopsony power?
From How This Paper Is Marked
One candidate writes a 20-mark essay on oligopoly with five separate, individually correct facts, no diagram, and no named firm. A second candidate writes three facts about the same topic, connected into one developed chain of reasoning, with a labelled payoff-matrix diagram and a real named firm. Which candidate is more likely to score higher overall?
From Costs
A firm's total cost of producing 0 to 6 units is: 0 units £20, 1 unit £26, 2 units £31, 3 units £35, 4 units £41, 5 units £49, 6 units £59.
Between which output levels do diminishing returns start to set in? (VERIDIAN-original — written in the same style as a confirmed real past-paper question type, not a reproduction of it.)
From Business Growth
A profitable, family-owned bakery chain turns down a franchising offer that its own financial advisers project would double revenue within three years, because the owners don't want outside investors involved in day-to-day decisions. Which constraint on growth does this best illustrate?
From Monopoly and Contestability
A monopolist earns supernormal profit this year. In a perfectly competitive market, that profit would be competed away by new entrants within a few years. What is the single spec-named reason a monopolist's supernormal profit can instead persist into the long run?
From Government Intervention
A single, dominant employer currently pays a wage below the value each extra worker adds to output, and employs fewer workers than a competitive version of the same market would. The government introduces a minimum wage set exactly at the wage a competitive version of this market would have produced. What is the most likely effect on employment?
From Revenue
For a firm that sells every unit at the same single price, how does average revenue (AR) relate to price (P)?
From Profits and Losses
A firm's average revenue exactly equals its average cost. A director describes this as 'breaking even — making no profit at all.' Is that description accurate in economic terms?
From Market Structures and Competition
A city's high street has around 40 independently-owned coffee shops. Each sells broadly similar coffee but competes through shop décor, loyalty apps, and locally-sourced pastries found nowhere else. Opening a new coffee shop requires only a standard commercial lease, available to any entrepreneur with modest starting capital.
Using the assumptions of monopolistic competition, explain why these coffee shops are unlikely to be either allocatively or productively efficient, even once the market has fully settled into its long-run equilibrium.
From Labour Markets
A national government sharply increases defence spending, causing a large rise in orders for a domestic aerospace manufacturer. Holding everything else constant, what is the most likely effect on the manufacturer's demand for aerospace engineers?
From How This Paper Is Marked
Why does WEC13 mark KAA (12 marks) and Evaluation (8 marks) as two independent bands, rather than one combined 20-mark impression of overall essay quality?
From Economies and Diseconomies of Scale
A firm doubles every input it uses — labour, capital, land — and its output more than doubles. What does this demonstrate?
From Business Growth
A conglomerate that owns businesses across three unrelated industries splits into three independent, separately-listed companies. Which of the following is a genuine risk of this demerger, rather than a guaranteed benefit?
From Monopoly and Contestability
A regulator changes the rules for a market so potential entrants can now lease, rather than being required to buy, all the specialised equipment needed to enter. What is the most likely effect on the market's contestability, and why?
From Government Intervention
A country's tourism sector employs a large share of low-paid workers and is highly labour-intensive — wage costs make up an unusually large share of total costs for a typical tourism firm. The sector is also highly competitive: hundreds of small, independent hotels, tour operators and restaurants compete for staff, and no single employer holds significant buying power over the local labour market. The government introduces a national minimum wage that raises the wage floor across every industry, including tourism.
Using the concepts developed in this lesson, which one of the following best explains the likely employment effect of the minimum wage specifically in this tourism sector?
From Revenue
A firm's nominal revenue rises from $100,000 in Year 1 (price index = 100) to $115,000 in Year 2 (price index = 110).
What is the firm's real revenue growth, in Year 1 prices? (Tests the money-to-real-terms conversion skill listed as a quantitative skill for this qualification.)
From Profits and Losses
A diagram shows MC, AC and AVC curves for a profit-maximising firm in a perfectly competitive market, with four price levels marked: P1 (below AVC's minimum), P2 (between AVC's minimum and AC's minimum), P3 (exactly at AC's minimum), and P4 (above AC's minimum).
At which price would the firm sell in the short run, but shut down in the long run? (VERIDIAN-original, same diagram-reading pattern confirmed in a real WEC13 Jan 2025 MCQ.)
From Oligopoly
Which of the following best describes what 'interdependence' means in an oligopoly, in the sense the spec uses the term?
From Labour Markets
A sawmill is the only major employer of forestry workers within reach of a remote logging town — every other employer of similarly-skilled workers is more than a day's drive away. The sawmill faces a weekly labour-supply curve of ACL = 10 + 0.5L (its average cost of labour, in £ per hour, where L is the number of forestry workers it employs), and estimates each additional worker's marginal revenue product at MRP_L = 40 − L.
At the profit-maximising quantity of labour, what hourly wage does the sawmill actually pay its workers? (VERIDIAN-original.)
From Business Objectives
A firm switches its objective from profit maximisation to sales volume maximisation. What happens to its supernormal profit?
From Economies and Diseconomies of Scale
Which of the following is a complete definition of economies of scale?
From Market Structures and Competition
A mid-sized manufacturer spends a fixed share of revenue on process R&D every year regardless of how much competitive pressure it currently faces, and its unit costs have fallen for six straight years as a result. Which type of efficiency does this best demonstrate?
From Monopsony
Why does a monopsonist's marginal cost of purchasing an input lie above the price it actually pays per unit (the supply curve), rather than equal to it?
From How This Paper Is Marked
Which job is this sentence doing: 'A national minimum wage set above the market-clearing wage causes an excess supply of labour — unemployment — because firms demand less labour at a higher wage while more workers are willing to supply it'?
From Costs
Assume, as in the chain-drill above, that labour is the only variable input, paid a constant wage. A firm's average variable cost is currently falling as output rises. Which one of the following must also be true?
From Business Growth
Which one of the following is the clearest example of a not-for-profit organisation, as distinct from a state-owned enterprise?
From Monopoly and Contestability
A streaming service charges a lower monthly price to customers who can prove they're full-time students. For this to be genuine third-degree price discrimination the firm can actually sustain, which of the following must also be true?
From Government Intervention
A national energy regulator's board is staffed largely by former senior executives of the energy firms it oversees, and over several years its price-cap decisions increasingly track what the largest suppliers want rather than what household bill-payers need. Which limit to government intervention does this best describe?
From Revenue
A firm sells 100 units at $10 each. It raises its price to $12 and quantity demanded falls to 92 units (midpoint elasticity = −0.46, i.e. inelastic).
What happens to total revenue?
From Profits and Losses
A firm's price exactly equals its average total cost. What is it earning?
From Oligopoly
Two rival firms have both been charging a high price for months. Firm A quietly cuts its price while Firm B keeps its price high and hasn't yet had time to respond. In this short window, what happens to each firm's profit?
From Labour Markets
A monopsony employer faces the same demand for labour (MRP_L) and the same market labour-supply curve that a hypothetical, perfectly competitive market of many small employers would face. Compared to that competitive outcome, what does the profit-maximising monopsonist do to employment and the wage it pays?
From Business Objectives
A company's manager is paid a bonus tied to total sales revenue, not profit. Which objective does this incentive structure predict the manager will pursue?
From Economies and Diseconomies of Scale
A pharmaceutical firm reduces its average cost by negotiating a bulk discount on raw materials because of the sheer volume it now purchases. Which type of economy of scale is this?
From Market Structures and Competition
A firm produces at exactly the lowest point of its average cost curve, but charges a price above marginal cost. Which type of efficiency does it achieve, and which does it fail?
From Monopsony
A monopsony employer faces an upward-sloping labour supply curve — to hire one more worker, it must raise the wage paid to every worker it already employs, not just the new hire. Compared to a competitive labour market, what happens to the wage rate and the number of workers hired?
From How This Paper Is Marked
One candidate concludes an essay on monopoly power with: 'Monopolies always harm consumers.' A second candidate concludes the same essay with: 'A monopoly harms consumers only where no credible threat of entry exists; in a genuinely contestable market, a monopolist may set a low, limit-deterring price close to MC, leaving consumers little worse off than under competition.' Assuming both candidates showed identical Knowledge, Application and Analysis beforehand, which conclusion is more likely to reach the top Evaluation band?
From Costs
A firm's long-run average cost is rising as output increases. Which term correctly describes this?
From Business Growth
Two airlines flying the same routes to the same destinations merge. What is the primary economic benefit this type of integration targets?
From Oligopoly
Two budget airlines operate the only two direct flights on a route. If both charge a high fare, each earns $12m a year. If one airline cuts its fare while the rival keeps its fare high, the airline that cut earns $18m and the rival earns $3m. If both cut their fare, each earns $6m.
Using this payoff matrix, which outcome are the airlines most likely to reach if they cannot communicate or enforce an agreement, and why?
From Government Intervention
A financial regulator's leadership is drawn mostly from senior bankers who previously worked at the firms it now oversees, and its rulings increasingly track what the largest banks want rather than what depositors or the wider public need. Which limit to government intervention does this describe?
From Revenue
A firm cuts its price and total revenue rises as a result. What does this tell you about demand over that price range?
From Profits and Losses
A firm's price covers its average variable cost but not its average total cost. In the short run, should it produce or shut down?
From Market Structures and Competition
An industry has thousands of small farms producing an identical grade of wheat, with full access to real-time price information and no restrictions at all on entering or leaving farming. Which market structure do these conditions describe?
From Monopsony
A firm buying sugar beet from independent farmers faces the supply schedule below. As it buys more beet in a season, it must offer a higher price per tonne to every farmer it buys from, not just the newest supplier. Quantity bought (000 tonnes): 10 | 11 | 12 | 13 | 14 Price paid per tonne (£): 30 | 31 | 32 | 33 | 34 Total cost of beet bought (£000s): 300 | 341 | 384 | 429 | 476
Using the table, what is the marginal cost of the 1,000 tonnes bought between 12,000 and 13,000 tonnes, and how does it compare to the £33 average price the firm pays per tonne at that quantity? (VERIDIAN-original — same calculation type as the real, verified marginal-cost-from-a-table questions this paper sets, not a reproduction of one.)
From How This Paper Is Marked
Two candidates both correctly define the divorce of ownership from control. Candidate A stops there. Candidate B goes on to derive, from that definition, which specific output a revenue-paid manager would choose, and why. Both statements are individually accurate. Why does Candidate B score more KAA marks?
From Costs
A firm producing 4,000 units has total costs of £12,000, of which £8,000 is total fixed cost.
What is its average fixed cost? (VERIDIAN-original — targets the trap named above: an examiner report found many candidates asked for average fixed cost instead calculated average cost.)
From Business Growth
A large firm is operating on the rising portion of its LRAC curve, beyond minimum efficient scale. Which of the following is the most likely structural cause?
From Monopoly and Contestability
Which of the following best describes a natural monopoly?
From Government Intervention
Using the same monopsonist as above (supply W=10+L, MCL=10+2L, MRP=70−2L, unregulated equilibrium L=15 at W=£25), the government now imposes a minimum wage of £27.
What happens to employment?
From Revenue
A firm's demand curve is a straight line, AR = 50 − 2Q. Using the fact that MR falls at twice the rate of AR for a straight-line demand curve, what is MR when Q = 10?
From Profits and Losses
A firm in monopolistic competition is earning supernormal profit today. What happens to that profit in the long run, and why?
From Oligopoly
A firm with strong existing brand recognition in household appliances wants to enter the electric-vehicle market, which is dominated by an established, well-known car brand. Why might its own strong brand still act as a barrier to entry rather than helping it enter?
From Labour Markets
Qualifying as a commercial airline pilot requires several years of flight-hour accumulation, expensive training, and a formal certification for each aircraft type flown. If airlines raise pilots' pay sharply, how quickly is the supply of qualified pilots able to respond? (VERIDIAN-original, same underlying mechanism as a confirmed real past-paper MCQ pattern.)
From Business Objectives
Which one of the following is most likely to reduce the size of the divorce of ownership from control inside a firm?
From Economies and Diseconomies of Scale
A firm privatised after decades as a state monopoly cuts its average costs without changing its scale of production at all, purely by removing internal slack and weak incentive structures. What does this most likely reduce?
From Market Structures and Competition
In the long run, both perfectly competitive and monopolistically competitive firms earn only normal profit. Which one of the two markets is also allocatively AND productively efficient in that long-run equilibrium?
From Monopsony
A monopsony employer is currently hiring at the point where its marginal cost of labour equals the demand for labour (MRP). Compared to a competitive labour market with many employers, what does this do to the wage rate and the level of employment?
From How This Paper Is Marked
A candidate writes a technically flawless 20-mark essay on economies of scale — correct diagram, correct mechanism, two developed chains of reasoning — but never names a real or plausible firm or industry anywhere in the answer. According to the gates confirmed across WEC13 mark schemes, what is the highest KAA level this candidate's essay can reach?
From Costs
A firm producing 10,000 units has total costs of £18,000, of which £5,000 is total fixed cost.
What is its average variable cost? (VERIDIAN-original, same calculation type as a confirmed real past-paper question.)
From Business Growth
A steelmaker and a battery manufacturer, based in different industries with no supply relationship between them, agree to jointly fund and share the risk of a single new plant — while both continuing to run their existing businesses completely independently everywhere else. What type of business arrangement is this? (VERIDIAN-original, written in the style of the confirmed Jan 2025 Sony/Honda MCQ — not a reproduction of it.)
From Monopoly and Contestability
A market has exactly one firm currently trading in it, but any potential rival could enter and exit with almost no unrecoverable cost, using the same technology as the existing firm. How does the concept of contestability describe this market's likely pricing behaviour?
From Government Intervention
A regulator forces a monopolist to set its price exactly where price equals marginal cost (P=MC), rather than at its profit-maximising price. What happens to allocative efficiency and consumer surplus, compared with the unregulated monopoly outcome?
From Revenue
A firm sells 100 units at $10 each. It cuts its price to $9 and quantity demanded rises to 130 units (midpoint elasticity = −2.48, i.e. elastic).
What happens to total revenue? (VERIDIAN-original — a calculation item of the type this spec point is actually assessed by.)
From Profits and Losses
A firm's current price is £8 per unit. Its average variable cost at this output is £9, and its average total cost is £13.
What should the firm do in the short run, and what should it plan for the long run? (VERIDIAN-original, same calculation pattern confirmed across the archive.)
From Oligopoly
A firm in a market with hundreds of small competitors cuts its price. A firm in a market with only three large competitors cuts its price by the same percentage. In which market is a rival more likely to notice and directly react to the cut?
From Labour Markets
A competitive firm hires labour up to the point where its marginal revenue product of labour equals the wage rate. If the wage rate rises and nothing else about the firm's costs or its product market changes, what happens to the firm's profit-maximising quantity of labour?
From Business Objectives
A firm currently produces at the output where MR = MC. It switches to the output where MR = 0 instead. What happens to its output and its price?
From Economies and Diseconomies of Scale
A firm's total fixed costs rise (a new licensing fee), while its variable costs are unchanged. What happens to its short-run marginal cost curve?
From Business Growth
Company X, a coffee-shop chain, takes over a coffee-bean farm that has long supplied one of its main rivals. Company Y, a different coffee-shop chain of similar size, takes over another coffee-shop chain selling an identical product in the same national market. Both companies state their objective is to increase long-run profit.
Explain, using the concepts of vertical and horizontal integration, why Company X and Company Y are likely to experience genuinely different types of benefit from their takeovers, even though both share the same stated objective.
From Monopoly and Contestability
A domestic airline has been the only carrier on a regional route for a decade, earning supernormal profit every year. Regulations require any new entrant to lease, not buy, its aircraft — leases are returnable with no penalty at the end of the term — and airport landing slots on this route are available to any airline that applies. A rival airline is known to have both the capital and the aircraft leases needed to enter within weeks, if the incumbent's price ever rose enough to make entry worthwhile.
Using the concept of contestability, explain why the incumbent airline is likely to price below its unconstrained profit-maximising monopoly price on this route, despite facing no actual current competitor.