May/June 2026 Paper 22

2026 · 5 questions · 24 parts · 90 marks

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Context for question 4
The UK Government imposes an indirect tax on a range of products. However, some goods and services do not have an indirect tax on them. These include books, children’s clothes and cakes. UK clothes firms would like the indirect tax removed from adults’ clothes. In 2023, there were some mergers between UK clothes firms. A year later, the UK Government planned to put an indirect tax on private sector school fees.
4(a)Scarcity Choice Opportunity CostEasy2 marks
Identify two characteristics of an economic good.

Two answers required.

4(b)DemandHard4 marks
Explain two reasons why demand for cakes may increase.

Answer

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4(c)Indirect Taxes SubsidiesHard6 marks
Analyse the effects of taxing private sector school fees.

Answer

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4(d)Business Growth MergersHard8 marks
Discuss whether or not a government should encourage clothes firms to merge.

Answer

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