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1

The diagram shows a production possibility curve for an economy that is producing at point P. good Y good X P Which quantity of X is given up to produce the quantity of Y shown...

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

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2

The Indian government operates a pension scheme. Which statement about this scheme would be classed as normative?

1. Basic economic ideas and resource allocation (AS Level)  →  1.2. Economic methodology

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

Open

3

Economics students have to fill in the gaps in the following passage. ‘The three basic questions arising from the economic problem of scarcity are 1 to produce, 2 to produce, and 3 to produce.’ Which combination is correct?

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

Open

4

What is not a function of money?

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

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

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5

The producer of a good with a price-elastic demand observes that a rise in its price is accompanied by a rise in total revenue. What might explain this?

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

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6

What will increase the producer surplus of farmers that grow carrots?

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

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7

A popular band is due to perform at a music concert in a venue that has a 5000-seat capacity. Recent appearances and the release of a new album have made the band even more popular. D1 and S represent the original demand and supply curves for concert tickets and D2 the new demand curve. Which diagram best represents the likely outcome on the market for concert tickets?

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

Why does an individual’s demand curve generally slope downwards to the right?

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

7. The price system and the microeconomy (A Level)  →  7.1. Utility

Open

9

What is price elasticity of supply?

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

Open

10

What is necessary for consumer surplus to be zero?

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

11

When will the price mechanism not function as a system for allocating goods?

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

7. The price system and the microeconomy (A Level)  →  7.8. Differing objectives and policies of firms

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

Open

12

The price of a product is above the market equilibrium price. Which combination of changes is certain to result as the market adjusts towards equilibrium?

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

13

What can be concluded about a good with a positive cross-price elasticity of demand?

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)  →  2.4. The interaction of demand and supply

Open

14

Which row shows the effect of the maximum and minimum prices described in the headings of the table?

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

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)  →  2.5. Consumer and producer surplus

Open

15

A government decides to introduce tolls to drive on all major roads. What is most likely to happen to the number of journeys made on major roads and on minor roads?

Open

16

The table shows data from a bus company that was privatised in 2013. year revenue $000 passenger journeys percentage change from previous year (%) +5 +2 –2 –1 What is the most likely conclusion that can be made from the data?

4. The Macroeconomy (AS Level)  →  4.1. National income statistics

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

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

Open

17

The diagram shows the market for electricity in a country that has a fixed supply of electricity and introduces a maximum price to make it affordable for poorer households. price of electricity O S market price maximum price D quantity of electricity What will be the effect of this?

3. Government microeconomic intervention (AS Level)  →  3.2. Methods and effects of government intervention in markets

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

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

Open

18

What is an example of a transfer payment?

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

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

8. Government microeconomic intervention (A Level)  →  8.2. Equity and redistribution of income and wealth

Open

19

Turkey can produce a good but also imports some of the good from Egypt. The Turkish currency depreciates against the Egyptian currency. How is this most likely to affect production of this good in Egypt and in Turkey?

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

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

Open

20

The table shows a country’s total output and its average price in each of three years. year output price ($) What can be concluded about output?

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

4. The Macroeconomy (AS Level)  →  4.4. Economic growth

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

Open

21

The diagram shows the change in the supply curve of imports, S–S1 to curve S–S2, after the introduction by the government of a trade protection measure. price of imports O quantity of imports S S1 S2 What is the form of protection?

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

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

Open

22

The aggregate demand (AD) and aggregate supply (AS) diagram shows an economy in equilibrium at X. In this economy, a severe shortage of raw materials causes a large rise in their price. The effect of this change is shown...

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

Open

23

Why might a country’s government impose a tax on fuel exports?

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

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

Open

24

What leads to a fall in a country’s terms of trade?

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

Open

25

The diagram has three lines that show the values of an economy’s exports, imports and trade balance between 2011 and 2019. year $m + – How should the lines be labelled?

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

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

Open

26

What would be the best policy to increase the value of a currency?

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

10. Government macroeconomic intervention (A Level)  →  10.3. Effectiveness of policy options to meet all macroeconomic objectives

Open

27

The central bank of an economy decides to raise interest rates in order to attract capital inflows and improve the financial account of the balance of payments. When is the central bank’s decision least likely to be effective?

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

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

Open

28

What could be described as an expansionary fiscal policy?

5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy

Open

29

Why will a contractionary monetary policy reduce inflation?

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

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

Open

30

The government of a country is worried about a large deficit on the current account of its balance of payments and an increasing rate of inflation. The country has a fixed exchange rate for its currency. Which policy measure is most likely to help the government to reduce the current account deficit and lower the rate of inflation?

6. International economic issues (AS Level)  →  6.5. Policies to correct imbalances in the 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