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1

In a command economy, what is the basis for determining the allocation of factors of production?

1. Basic economic ideas and resource allocation (AS Level)  →  1.4. Resource allocation in different economic systems

1. Basic economic ideas and resource allocation (AS Level)  →  1.1. Scarcity, choice and opportunity cost

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2

The diagrams show the change in a country’s production possibility curve between Year 1 and Year 2. consumer goods capital goods Year 1 consumer goods capital goods Year 2 What can be deduced from the diagrams?

1. Basic economic ideas and resource allocation (AS Level)  →  1.5. Production possibility curves

Open

3

Which statement about trade unions is normative?

8. Government microeconomic intervention (A Level)  →  8.3. Labour market forces and government intervention

11. International economic issues (A Level)  →  11.6. Globalisation

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

Open

4

A worker can make 10 hats or 5 pairs of shoes in a day. In the market three hats can be sold at the same price as two pairs of shoes. The worker should make A 4 hats and 3 pairs of shoes daily. B 6 hats and 2 pairs of shoes daily. C hats only. D shoes only.

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5

The table shows the market supply for a raw material and the individual demand of the three firms, X, Y and Z, which are its only buyers. price $ (per kilo) market supply (000s) demand by X (000s) demand by Y (000s) demand by Z (000s) What is the equilibrium market price of the raw material?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

Open

6

In 2008 the demand curve for new cars in the European Union shifted to the left. Which change could have caused such a shift?

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

Open

7

Worldwide, the film industry has increased its expenditure to over $1 billion each year on successful anti-piracy measures which it finances by charges on DVD products. How would this be shown...

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

8

The demand for a commodity has unitary price elasticity. Which diagram shows the relationship between total expenditure on the commodity and its price?

2. The price system and the microeconomy (AS Level)  →  2.2. Price elasticity, income elasticity and cross elasticity of demand

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

2. The price system and the microeconomy (AS Level)  →  2.3. Price elasticity of supply

Open

9

The table gives information about the market for two models of car. model number of cars sold per week cross elasticity of demand with respect to the price of petrol 1200 cc 10 000 –0.25 2000 cc 5 000 –0.50 If the prices of the cars remain unchanged, but the price of petrol increases by 100 %, what will be the effect on the number of cars sold per week?

2. The price system and the microeconomy (AS Level)  →  2.2. Price elasticity, income elasticity and cross elasticity of demand

Open

10

In 2008 a disease killed a significant number of sheep used to produce wool. How would the short-run effect be shown...

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

Open

11

The government imposes a maximum price of P2 on a product. O S D Q2 P2 P1 Q1 Q3 quantity price What will be the position after this action?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy

Open

12

The diagram shows a demand curve for journeys on a toll road. number of journeys per day toll per journey ($) demand If there is a reduction in the toll from $5 to $3, what is the resulting increase in the daily consumer surplus?

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

Open

13

What does not happen when price acts as a means to allocate resources?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

1. Basic economic ideas and resource allocation (AS Level)  →  1.1. Scarcity, choice and opportunity cost

2. The price system and the microeconomy (AS Level)  →  2.3. Price elasticity of supply

Open

14

James grows fruit trees in his garden. They attract butterflies and bees. What is not an externality of this?

7. The price system and the microeconomy (A Level)  →  7.4. Private costs and benefits, externalities and social costs and benefits

Open

15

The table shows some of the costs when a firm produces a good. output total cost to society $ external cost $ What is the additional cost to a firm of producing the 24th unit?

7. The price system and the microeconomy (A Level)  →  7.4. Private costs and benefits, externalities and social costs and benefits

7. The price system and the microeconomy (A Level)  →  7.5. Types of cost, revenue and profit, short-run and long-run production

Open

16

What makes it particularly difficult to take decisions using cost-benefit analysis?

7. The price system and the microeconomy (A Level)  →  7.4. Private costs and benefits, externalities and social costs and benefits

Open

17

Which good is excludable but non-rival?

3. Government microeconomic intervention (AS Level)  →  3.1. Reasons for government intervention in markets

1. Basic economic ideas and resource allocation (AS Level)  →  1.6. Classification of goods and services

Open

18

The diagram shows the demand and supply curves of a good. O quantity D S J price The government sets a maximum price of OJ for the good. How will this affect the consumers and producers of the good?

2. The price system and the microeconomy (AS Level)  →  2.4. The interaction of demand and supply

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

Open

19

The diagram shows production possibility curves for two countries, X and Y. O good L good M country Y country X What can be deduced from the diagram?

1. Basic economic ideas and resource allocation (AS Level)  →  1.5. Production possibility curves

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

Open

20

The statements that follow relate to possible gains from an increase in free trade. Which gain is least certain to result?

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

11. International economic issues (A Level)  →  11.6. Globalisation

Open

21

A group of countries decides to change from being a customs union to being an economic union. What additional feature will this give the group?

11. International economic issues (A Level)  →  11.6. Globalisation

6. International economic issues (AS Level)  →  6.1. The reasons for international trade

6. International economic issues (AS Level)  →  6.2. Protectionism

Open

22

The table shows the balance in $ million for four items in a country’s current account for two years. visibles invisibles income transfers Year 1 –72 –3 –24 Year 2 –87 –44 What can be concluded about the changes between Year 1 and Year 2?

6. International economic issues (AS Level)  →  6.3. Current account of the balance of payments

6. International economic issues (AS Level)  →  6.5. Policies to correct imbalances in the current account of the balance of payments

Open

23

The diagram shows changes in the numbers employed in four different industries in a city between 2002 and 2007. 2002 2003 2004 2005 2006 2007 employment (000s) finance manufacturing education leisure What can be concluded from the diagram?

4. The Macroeconomy (AS Level)  →  4.3. Aggregate Demand and Aggregate Supply analysis

9. The macroeconomy (A Level)  →  9.3. Employment/unemployment

5. Government macroeconomic intervention (AS Level)  →  5.3. Monetary policy

Open

24

The average consumer divides his expenditure between food, accommodation and clothing in the ratio 5 : 3 : 2. During the course of a year, the price of food rises by 10 %, the price of accommodation remains constant and the price of clothing falls by 5 %. What is the increase in the Consumer Price Index over the year?

2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus

2. The price system and the microeconomy (AS Level)  →  2.2. Price elasticity, income elasticity and cross elasticity of demand

Open

25

Which statement about inflation is correct?

4. The Macroeconomy (AS Level)  →  4.6. Price stability

9. The macroeconomy (A Level)  →  9.4. Money and banking

Open

26

The table shows a country’s rate of inflation for four years. year rate of inflation % 4.0 3.0 2.5 2.0 What fell between 2005 and 2008?

4. The Macroeconomy (AS Level)  →  4.6. Price stability

10. Government macroeconomic intervention (A Level)  →  10.2. Links between macroeconomic problems and their interrelatedness

Open

27

When is a deficit on the current account of the balance of payments likely to worsen?

6. International economic issues (AS Level)  →  6.5. Policies to correct imbalances in the current account of the balance of payments

6. International economic issues (AS Level)  →  6.3. Current account of the balance of payments

Open

28

What would identify a country with a balance of payments disequilibrium?

6. International economic issues (AS Level)  →  6.3. Current account of the balance of payments

11. International economic issues (A Level)  →  11.1. Policies to correct disequilibrium in the balance of payments

Open

29

The table shows the number of Jamaican dollars which exchanged for one unit of other currencies in June and July 2001. Jamaican $ June 2001 Jamaican $ July 2001 US$ 45.78 45.77 UK£ 63.86 64.37 Guyana $ 0.25 0.25 Barbados $ 23.19 23.12 What might be concluded from the table?

2. The price system and the microeconomy (AS Level)  →  2.1. Demand and supply curves

6. International economic issues (AS Level)  →  6.4. Exchange rates

Open

30

Following a long period of depreciation of the US$, both the US and UK monetary authorities raised their domestic interest rate. What will happen to the value of the exchange rate of the US$ in terms of UK£?

6. International economic issues (AS Level)  →  6.4. Exchange rates

11. International economic issues (A Level)  →  11.2. Exchange rates

Open