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1

Which question does not directly refer to the basic economic problem?

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

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

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

Open

2

The diagram shows the change in an economy’s production possibility curve as it grows in the long run. Which movement from point X is most likely to show the highest potential for growth?

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

Open

3

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

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

Open

4

What term is used by economists for the income received by the factor of production enterprise?

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

Open

5

The diagram shows the demand curve for housing. O quantity price D What is not assumed to remain constant when drawing this curve?

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

6

What does not cause the demand curve for cars to shift to the right?

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

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

Open

7

An individual reacts to a 5% increase in the price of good X by increasing the proportion of his income that he spends on good X from 2% to 3%. If there are no other changes, what can be concluded from this about the individual’s demand for good X?

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

Open

8

The cross-elasticity of demand for good X with respect to good Y is –0.5. What can be concluded from this?

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

Open

9

The diagram shows a supply curve for beef. price quantity O S What explains why the supply curve for beef slopes upwards?

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

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

Open

10

Which business is likely to be the slowest to alter its output in response to a sustained increase in demand for its product?

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

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

Open

11

In a particular year, 12 000 units of a good are sold at $1 per unit. In a later year, 14 000 units are sold at $1.20 per unit. If consumer tastes have remained constant, what could account for the change between the two years?

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

12

The diagram shows demand and supply curves for petrol . The initial equilibrium is at X. What could be the new equilibrium if there were a large fall in the price of cars?

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

The diagram shows an individual’s demand curve for a commodity. D x y z P Q O price quantity The supplier of the commodity charges a unit price of OP but consumers are currently required to purchase a minimum quantity, OQ. Which areain the diagram measure the net gain in consumer surplus from the removal of the minimum purchase requirement?

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

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

Open

14

In 2011, the Health Ministry in a country encouraged parents to have their children vaccinated against measles. The parents did not have to use the vaccine and did not have to pay for it. The government cancelled other projects to fund the programme from taxation because research concluded that the vaccine benefited the community by preventing the spread of a serious illness. Which concepts are implied in the above statement?

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

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

Open

15

A gardener plants bamboo to create an attractive environment along the roadside. The bamboo grows into the garden of his neighbour, who removes the bamboo with a chemical spray. What cannot be concluded about the outcome of the planting?

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

Open

16

A cost-benefit analysis of a proposed underground railway produced the following statistics. annual costs and benefits $ million annual capital cost operating and maintenance costs fare revenue savings to private travellers savings to business other economic benefits What can be concluded from the statistics?

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

Open

17

What is the best example of what was once a public good becoming a private good?

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 market for onions in equilibrium at point X. The government has a stock of onions and wants to establish a new equilibrium at point Y. price quantity O supply demand Z Y X Which actions should the government take?

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

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

Open

19

The diagram illustrates the production possibility curves for countries S and T producing goods X and Y. country S good X good Y country T good X good Y Countries S and T specialise in the product for which they have the lower opportunity cost. They trade with each other at the rate of two good X for one good Y. What is a possible combination of goods for country S to consume after specialisation and trade have taken place?

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

What is the most likely reason why Pakistan might reduce its trade barriers on imports?

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

Open

21

A particular good in the Barbados market could be supplied by domestic producers, or producers in Trinidad & Tobago, or producers in the USA, at the prices shown...

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

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

Open

22

A Japanese car manufacturer established a successful factory in France. How would this be shown...

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

Open

23

The graph shows changes in the unemployment rates in countries X, Y and Z over the period 2000 to 2010. All three countries faced recession between 2008 and 2010. year unemployment rate % X Y Z Which conclusion can be drawn from the graph about the period 2000 to 2010?

4. The Macroeconomy (AS Level)  →  4.5. Unemployment

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

Open

24

Which supply-side measure is most likely to produce short-run growth in a country’s aggregate supply?

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

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

Open

25

An economy is experiencing accelerating cost-push inflation. Which group is likely to be least concerned by this?

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

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

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

Open

26

The table shows the Consumer Price Index (CPfor a country. year CPI Which statement about the period 2008 to 2013 is correct?

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

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

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

Open

27

At a time when international demand for oil was high, Bolivia encouraged investment by foreign firms in order to exploit its oil and gas resources. What overall impact would this have on the balance of payments of Bolivia?

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

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

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

Open

28

An economy with a fixed exchange rate experiences an increased deficit on the current account of the balance of payments. What is most likely to increase as a consequence?

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

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

29

The diagram shows the number of US dollars ($) and Euros (€) which exchanged for one pound sterling (£) between 2002 and 2004. 1.8 1.7 1.6 1.5 1.4 1.3 € per £ $ per £ What happened to the exchange rate of the $ against the £ and € during this period?

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

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

Open

30

In a time of recession, a government decided to sell a loss-making state-owned industry to a foreign private company. What is the most likely immediate result?

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

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

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

Open