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1

All countries need to produce food. Which type of agriculture would make the best use of the resources of developing and developed economies?

1. The basic economic problem  →  1.2. The factors of production

3. Microeconomic decision makers  →  3.6. Firms and production

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2

A farmer reduces the land used to grow wheat from 80 hectares to 60 hectares and increases the use of the land for growing potatoes from 80 to 100 hectares. What is the opportunity cost of this change?

1. The basic economic problem  →  1.3. Opportunity cost

3. Microeconomic decision makers  →  3.7. Firms’ costs, revenue and objectives

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3

The diagram shows the change in an economy’s production possibility curve (PPC) from year 1 to year 2. O goods services year 1 year 2 What might explain the change from year 1 to year 2?

1. The basic economic problem  →  1.4. Production possibility curve (PPC) diagrams

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4

What can be found in a market economy?

2. The allocation of resources  →  2.10. Market failure

2. The allocation of resources  →  2.9. Market economic system

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5

A private sector firm is given a contract by the government to supply a country’s water. Which government directive will minimise the risk of market failure?

2. The allocation of resources  →  2.10. Market failure

2. The allocation of resources  →  2.11. Mixed economic system

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6

What is meant by the equilibrium price in the market for a good?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.5. Price determination

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7

The table shows the effect of a change in the market price from $5 to $6 on the supply of mobile phones. price ($) supply 10 000 15 000 Which statement about the price elasticity of supply of mobile phones is correct?

2. The allocation of resources  →  2.8. Price elasticity of supply (PES)

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8

What could discourage women from seeking employment?

4. Government and the macroeconomy  →  4.7. Employment and unemployment

3. Microeconomic decision makers  →  3.3. Workers

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9

What would be least likely to act as a store of value during a period of rapid inflation?

4. Government and the macroeconomy  →  4.8. Inflation and deflation

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10

The table shows how three people (X, Y and Z) spend their income. person X person Y person Z food, clothing and housing 30% 25% 50% entertainment and leisure 35% 35% 25% luxury goods 35% 40% 25% For these three people, what is the most likely order of income, from lowest income to highest income?

3. Microeconomic decision makers  →  3.2. Households

5. Economic development  →  5.1. Living standards

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11

The table shows the weekly values of certain items for the average person in each group. In which group does the average person save the most?

3. Microeconomic decision makers  →  3.2. Households

3. Microeconomic decision makers  →  3.3. Workers

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12

Which type of business is always in the public sector?

3. Microeconomic decision makers  →  3.5. Firms

2. The allocation of resources  →  2.10. Market failure

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13

When will a firm maximise its profits?

3. Microeconomic decision makers  →  3.7. Firms’ costs, revenue and objectives

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14

The table shows the costs of a firm. units of output variable costs ($) total costs ($) What is the value of the firm’s fixed costs?

3. Microeconomic decision makers  →  3.7. Firms’ costs, revenue and objectives

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15

A firm’s average revenue is $10. It sells 2000 units. What is the firm’s total revenue and the price of the product?

3. Microeconomic decision makers  →  3.7. Firms’ costs, revenue and objectives

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16

Which measure would a government take to reduce a current account deficit?

6. International trade and globalisation  →  6.4. Current account of balance of payments

4. Government and the macroeconomy  →  4.3. Fiscal policy

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17

What is an example of an expansionary fiscal policy?

4. Government and the macroeconomy  →  4.3. Fiscal policy

4. Government and the macroeconomy  →  4.4. Monetary policy

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18

A government lowers interest rates to encourage more borrowing and spending by households to increase economic growth. Why could this lead to a conflict with other government aims?

4. Government and the macroeconomy  →  4.2. The macroeconomic aims of government

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19

Which policy would be most likely to reduce unemployment in the short run?

4. Government and the macroeconomy  →  4.7. Employment and unemployment

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20

A country has the highest GDP per head in the world. What is this information most likely to suggest about the country?

4. Government and the macroeconomy  →  4.6. Economic growth

5. Economic development  →  5.1. Living standards

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21

What is included in the Human Development Index (HDof a country?

5. Economic development  →  5.1. Living standards

5. Economic development  →  5.3. Population

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22

What is an example of someone who lost their job because of structural unemployment?

4. Government and the macroeconomy  →  4.7. Employment and unemployment

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23

An economy experienced deflation. Which combination shows the likely outcome of this?

4. Government and the macroeconomy  →  4.8. Inflation and deflation

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24

A developing country starts to show increases in economic growth. What is most likely to occur?

4. Government and the macroeconomy  →  4.6. Economic growth

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25

A country’s minister for agriculture said “the biggest challenge the country faces is to develop irrigation so that we are not at the mercy of the weather for crucial export earnings”. Which type of country is this most likely to be?

1. The basic economic problem  →  1.1. The nature of the economic problem

3. Microeconomic decision makers  →  3.5. Firms

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26

The table shows the birth rate and death rate for four countries for a given year. If there is no migration, which country has the greatest rate of increase in population?

5. Economic development  →  5.3. Population

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27

What usually decreases when there is a depreciation of a country’s foreign exchange rate?

6. International trade and globalisation  →  6.3. Foreign exchange rates

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28

A country imposes tariffs and quotas on imported goods. What will citizens of that country experience?

6. International trade and globalisation  →  6.2. Globalisation, free trade and protection

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29

The table shows a country’s balance of payments that has no secondary income (current transfers). item $ million exports of goods imports of goods exports of services imports of services net primary income – 40 What is the country’s current account balance?

6. International trade and globalisation  →  6.4. Current account of balance of payments

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30

Skin creams preventing sunburn made in the European Union (EU) are more effective than those made in the United States (US). US tourists stock up on the creams when visiting Europe. Such creams are banned from production in the US because of the chemicals in them. In 2013, negotiations began to remove this ban in order to allow production in the US. How is this freer trade likely to affect manufacturers of skin creams in the US and the EU?

6. International trade and globalisation  →  6.2. Globalisation, free trade and protection

Open