9708_w09_qp_12
A paper of Economics, 9708
Questions:
30
Year:
2009
Paper:
1
Variant:
2
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7
Two goods, X and Y, are complementary goods. Column 1 of the table below shows the original market situation at time period 1 and column 2 shows the situation following an increase in the price of good Y. price of good X quantity demanded price of good Y quantity demanded The value of cross elasticity of demand for good X with respect to the price of good Y lies between A –1.7 and –2.6. B –0.8 and –1.3. C –0.3 and –0.8. D +0.3 and +0.6.
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
18
A country has the correct climate for growing tea, which is produced very cheaply and exported. Fruit is also grown, but this costs more as the climate is not as suitable. Fruit can be sold at a higher price than tea so some of the land used for tea is switched to fruit. What will definitely happen as a result?
6. International economic issues (AS Level)  →  6.1. The reasons for international trade
5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy
1. Basic economic ideas and resource allocation (AS Level)  →  1.1. Scarcity, choice and opportunity cost
Open
19
A government has been protecting its domestic car industry with a quota on imported cars. It then removes the quota and replaces it with a subsidy to domestic car producers. How will this change affect the price of cars and the level of consumer choice?
5. Government macroeconomic intervention (AS Level)  →  5.4. Supply-side policy
5. Government macroeconomic intervention (AS Level)  →  5.2. Fiscal policy
2. The price system and the microeconomy (AS Level)  →  2.5. Consumer and producer surplus
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21
The table shows the balances for four items in a country’s current account on the balance of payments for two years. visible invisible income current transfers year 1 –72 –24 year 2 –87 –3 –4 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
26
The table shows indicators of a country’s economic performance over a two-year period. year exchange rate index volume of exports index volume of imports index balance of trade in goods and services ($) zero +500 million What is consistent with the above information?
6. International economic issues (AS Level)  →  6.4. Exchange rates
11. International economic issues (A Level)  →  11.3. Economic development
6. International economic issues (AS Level)  →  6.1. The reasons for international trade
Open
28
Country X trades with only two countries, the USA and Japan. 90 % of the country’s trade is with the USA and 10 % is with Japan. The original value of the trade-weighted exchange rate index is 100. The value of country X’s currency against the US$ rises by 10%. The value of country X’s currency against the Japanese yen rises by 50 %. What will be the value of country X’s new trade-weighted exchange rate index?
6. International economic issues (AS Level)  →  6.4. Exchange rates
11. International economic issues (A Level)  →  11.2. Exchange rates
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30
Copyright Acknowledgements: Question 24 © For How Much Longer Can the Emerald Isle Gleam; p 96; The Economist; 18 March 2006 30 Tom has set up his own business, which is based in premises owned by Fanda. All machinery is hired from an equipment company. Both Tom and Fanda are employed in the business. What describes the earnings of Tom and Fanda?
8. Government microeconomic intervention (A Level)  →  8.3. Labour market forces and government intervention
7. The price system and the microeconomy (A Level)  →  7.5. Types of cost, revenue and profit, short-run and long-run production
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