Please check the examination details below before entering your candidate information
Candidate surname Other names
Centre Number Candidate Number
Pearson Edexcel
Level 3 GCE
Monday 18 May 2020
Morning (Time: 2 hours) Paper Reference 9EB0/01
Economics B
Advanced
Paper 1: Markets and how they work
You do not need any other materials. Total Marks
Instructions
• Use black ink or ball-point pen.
• centre
Fill in the boxes at the top of this page with your name,
number and candidate number.
• Answer all questions.
• Answer the questions in the spaces provided
– there may be more space than you need.
Information
• The total mark for this paper is 100.
• The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• Check your answers if you have time at the end.
Turn over
*P61851A0128*
P61851A
©2020 Pearson Education Ltd.
1/1/1/1/1/
, Answer ALL questions.
SECTION A
Read the following extracts (A to C) before answering Question 1.
Write your answers in the spaces provided.
Extract A
How British Airways (BA) is turning itself into a low-cost airline
BA’s efforts to compete with budget airlines such as EasyJet and Ryanair on short-haul
flights has led to a number of changes that have been criticised by loyal customers and
created bad publicity for the long-established business. BA took the decisions to scrap
free meals on all short-haul flights and reconfigure aircraft to add more seats, resulting in 5
reduced legroom on some aircraft.
The reinvention of BA is continuing with the carrier planning to launch the option of
no-frills fares on its long-haul flights. The cheaper tickets, which do not include the cost
of luggage or seat selection, will help BA compete with the likes of low-cost long-haul
rival Norwegian on key routes to America. 10
BA faced further bad publicity when news broke it had been fined €104m (£90m) by the
European Commission in 2017 for its role in a major price-fixing scandal. Eleven airlines
were fined a total of €776m for their role in a cartel to fix fuel and security charges on
flights within the European Economic Area.
Despite the bad publicity the business is performing well financially. In 2017 BA 15
generated sales revenue of £12.30bn, which was a 7.3% increase on the previous year. In
2017 the profit for the year increased from £1.28bn to £1.4bn.
(Sources: adapted from https://www.telegraph.co.uk/travel/comment/british-airways-is-going-budget-on-
long-haul-flights/,
https://www.statista.com/statistics/264296/british-airways-worldwide-revenues-since-2006/.
http://www.cityam.com/261156/eu-slaps-eur776-million-fine-air-cargo-cartel)
2
*P61851A0228*
, Extract B
Government sets out its vision for UK aviation
In 2017 the UK Government launched its initial plans to develop a new aviation strategy
to help shape the future of the aviation industry to 2050 and beyond. It looks at how the
government can support future growth in an industry which directly supports 240,000
jobs and contributes around £22bn to the UK economy each year. The plan recognises 5
that larger airports help to attract more investment and visitors and connects UK firms to
trading opportunities overseas.
The strategy was announced at the launch of a £1bn project to double the size of
Manchester Airport’s Terminal 2. The project will create 1,500 jobs, allow for more
international destinations, and grow passenger numbers from 27 million to 45 million 10
a year.
In addition, it was announced that families flying on holiday will no longer have to pay air
passenger duty (APD) for children under the age of 16. APD was introduced in 1994 as
an indirect tax to pay for the environmental costs of air travel and is levied against each
passenger on flights departing from the UK. 15
(Sources: adapted from http://www.thisismoney.co.uk/money/holidays/article-2859186/
Flight-taxes-children-abolished-cut-hundreds-pounds-cost-family-holidays.html,
https://www.gov.uk/government/news/government-sets-out-vision-for-future-of-uk-aviation)
3
*P61851A0328* Turn over
Candidate surname Other names
Centre Number Candidate Number
Pearson Edexcel
Level 3 GCE
Monday 18 May 2020
Morning (Time: 2 hours) Paper Reference 9EB0/01
Economics B
Advanced
Paper 1: Markets and how they work
You do not need any other materials. Total Marks
Instructions
• Use black ink or ball-point pen.
• centre
Fill in the boxes at the top of this page with your name,
number and candidate number.
• Answer all questions.
• Answer the questions in the spaces provided
– there may be more space than you need.
Information
• The total mark for this paper is 100.
• The marks for each question are shown in brackets
– use this as a guide as to how much time to spend on each question.
• Calculators may be used.
Advice
• Read each question carefully before you start to answer it.
• Try to answer every question.
• Check your answers if you have time at the end.
Turn over
*P61851A0128*
P61851A
©2020 Pearson Education Ltd.
1/1/1/1/1/
, Answer ALL questions.
SECTION A
Read the following extracts (A to C) before answering Question 1.
Write your answers in the spaces provided.
Extract A
How British Airways (BA) is turning itself into a low-cost airline
BA’s efforts to compete with budget airlines such as EasyJet and Ryanair on short-haul
flights has led to a number of changes that have been criticised by loyal customers and
created bad publicity for the long-established business. BA took the decisions to scrap
free meals on all short-haul flights and reconfigure aircraft to add more seats, resulting in 5
reduced legroom on some aircraft.
The reinvention of BA is continuing with the carrier planning to launch the option of
no-frills fares on its long-haul flights. The cheaper tickets, which do not include the cost
of luggage or seat selection, will help BA compete with the likes of low-cost long-haul
rival Norwegian on key routes to America. 10
BA faced further bad publicity when news broke it had been fined €104m (£90m) by the
European Commission in 2017 for its role in a major price-fixing scandal. Eleven airlines
were fined a total of €776m for their role in a cartel to fix fuel and security charges on
flights within the European Economic Area.
Despite the bad publicity the business is performing well financially. In 2017 BA 15
generated sales revenue of £12.30bn, which was a 7.3% increase on the previous year. In
2017 the profit for the year increased from £1.28bn to £1.4bn.
(Sources: adapted from https://www.telegraph.co.uk/travel/comment/british-airways-is-going-budget-on-
long-haul-flights/,
https://www.statista.com/statistics/264296/british-airways-worldwide-revenues-since-2006/.
http://www.cityam.com/261156/eu-slaps-eur776-million-fine-air-cargo-cartel)
2
*P61851A0228*
, Extract B
Government sets out its vision for UK aviation
In 2017 the UK Government launched its initial plans to develop a new aviation strategy
to help shape the future of the aviation industry to 2050 and beyond. It looks at how the
government can support future growth in an industry which directly supports 240,000
jobs and contributes around £22bn to the UK economy each year. The plan recognises 5
that larger airports help to attract more investment and visitors and connects UK firms to
trading opportunities overseas.
The strategy was announced at the launch of a £1bn project to double the size of
Manchester Airport’s Terminal 2. The project will create 1,500 jobs, allow for more
international destinations, and grow passenger numbers from 27 million to 45 million 10
a year.
In addition, it was announced that families flying on holiday will no longer have to pay air
passenger duty (APD) for children under the age of 16. APD was introduced in 1994 as
an indirect tax to pay for the environmental costs of air travel and is levied against each
passenger on flights departing from the UK. 15
(Sources: adapted from http://www.thisismoney.co.uk/money/holidays/article-2859186/
Flight-taxes-children-abolished-cut-hundreds-pounds-cost-family-holidays.html,
https://www.gov.uk/government/news/government-sets-out-vision-for-future-of-uk-aviation)
3
*P61851A0328* Turn over
