One online written paper of 3 hours 20 minutes, including reading time, with answers typed in Word.
The paper
One online written exam, answers typed in Word
Time
3 hours 20 minutes, including reading time
Weights
Economic schools, the economic way of thinking and recent history 5%; Microeconomics 40%; Macroeconomics and the role of government 55%
What the paper asks
Questions of varying marks, most mixing a short calculation with explanation and comment.
Many set a business scenario and ask you to apply a model to it and draw a conclusion.
About 20% of marks test knowledge, 60% application and 20% higher-order skills.
Diagrams in a typed exam
You type your answers, so practise describing a diagram in words: the axes, the curves, which curve shifts and which way, and the new equilibrium. Every model solution in this course does this.
Try a question
Elasticity of demand for travel insurance
Markets · Straightforward · 8 marks
Wayfarer Cover sells single-trip travel insurance online. When it cut its price from £40 to £32 a policy, monthly sales rose from 5,000 to 6,000 policies. Assume nothing else affecting demand changed.
(i)
Calculate the price elasticity of demand using the original price and quantity as the base, to 2 decimal places.
2 marks
(ii)
Calculate the price elasticity of demand using average (midpoint) values, to 2 decimal places.
2 marks
(iii)
Calculate the change in Wayfarer's monthly premium income, in £.
2 marks
(iv)
Explain why the two methods give different answers, and comment on which result is consistent with the change in premium income.