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1

The diagram shows an initial production possibility curve of PPC1. capital goods consumer goods PPC2 PPC1 O What may cause the movement of the production possibility curve from PPC1 to PPC2?

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

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2

An increase in the number of manufacturing robots in the car manufacturing industry represents an increase in the quantity of which factor of production?

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

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3

The diagram shows the choices for an individual between leisure and earnings. earnings $ hours of leisure per day X Y What is the opportunity cost to the individual of the extra earnings when moving from position X to position Y?

1. The basic economic problem  →  1.3. Opportunity cost

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

3. Microeconomic decision makers  →  3.3. Workers

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4

A government taxes the production of cars. What is likely to decrease?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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

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5

Which pair of economic institutions can be found in a market economy?

3. Microeconomic decision makers  →  3.1. Money and banking

3. Microeconomic decision makers  →  3.5. Firms

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

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6

Developers want to increase the size of a major retail shopping area in a city. It is thought that the proposal would create hundreds of jobs, be profitable for the shops but cause major traffic congestion. What economic concepts are directly involved in this statement?

4. Government and the macroeconomy  →  4.6. Economic growth

2. The allocation of resources  →  2.2. The role of markets in allocating resources

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7

The diagram shows the market for rice. price P2 P1 quantity O Q2 Q1 D S2 S1 What would have caused the equilibrium price to rise from OP1 to OP2?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.2. The role of markets in allocating resources

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8

What might a trade union usually be expected to do for its members?

3. Microeconomic decision makers  →  3.4. Trade unions

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9

What is the usual reason why citizens trust their country’s banknotes?

3. Microeconomic decision makers  →  3.1. Money and banking

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10

In the diagram, D1D1 and S1S1 represent the demand for and the supply of labour. W indicates a legal minimum wage. An influx of immigrant labour causes the supply curve for labour to shift from S1S1 to S2S2. wage ($) labour 6 S1 S1 S2 S2 D1 D1 W How many people will be employed if the minimum wage legislation is then abolished?

3. Microeconomic decision makers  →  3.3. Workers

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11

The table shows how three people 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 highest income to lowest income?

3. Microeconomic decision makers  →  3.2. Households

5. Economic development  →  5.1. Living standards

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12

How does a firm guarantee that it makes the maximum profit?

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

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13

Which characteristic does a firm in perfect competition have in common with a monopoly?

3. Microeconomic decision makers  →  3.8. Market structure

3. Microeconomic decision makers  →  3.5. Firms

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14

The table shows the units of factors of production that a firm needs to employ for two different levels of output. land labour capital output What is the firm experiencing?

3. Microeconomic decision makers  →  3.5. Firms

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

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15

The diagram shows the demand and supply of places in independent schools which charge fees. The equilibrium position is X. The costs of independent schools rise. Also a report is issued which states that Government schools achieve very good examination results. What is likely to be the new equilibrium position?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.2. The role of markets in allocating resources

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16

A government wishes to stimulate economic recovery. Which action will assist this?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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17

What is an expansionary monetary policy?

4. Government and the macroeconomy  →  4.4. Monetary policy

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18

A government decides to make two changes to its taxation policies. It lowers the tax on petrol and raises the tax on food. How do these changes affect the regressive nature of the taxes?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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19

The table shows a government’s receipts from taxation. $m air passenger duty company profits tax import duty income tax insurance policy tax sales tax (VAT) What is the total amount of revenue raised by indirect taxes?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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20

What is Gross Domestic Product (GDP) divided by to calculate GDP per head?

4. Government and the macroeconomy  →  4.6. Economic growth

5. Economic development  →  5.3. Population

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21

Who is made worse off during a period of deflation?

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

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22

The table gives information about three economic indicators in four countries. inflation % interest rates % unemployment % country W 1.4 3.4 10.2 country X 3.7 8.7 12.3 country Y 3.6 7.3 14.2 country Z 2.1 6.0 7.7 What may be concluded from this information?

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

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

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23

What must result when a country experiences economic growth?

4. Government and the macroeconomy  →  4.6. Economic growth

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24

Why may the figure calculated for a developing country’s Gross Domestic Product be inaccurate?

5. Economic development  →  5.4. Differences in economic development between countries

4. Government and the macroeconomy  →  4.6. Economic growth

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25

The table gives information on four countries. Which country is likely to be most developed?

5. Economic development  →  5.3. Population

5. Economic development  →  5.4. Differences in economic development between countries

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26

It has been predicted that by 2050 China will have 53 million fewer children under 14, 100 million fewer workers and 234 million more people aged over 60. What will be the likely effect in China of these changes?

5. Economic development  →  5.3. Population

4. Government and the macroeconomy  →  4.6. Economic growth

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27

What might cause the balance on the current account of Mauritius to improve?

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

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28

A country says that it wishes to increase its trade protection policies. What might that involve?

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

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29

It has been suggested that all countries producing arms should ban the export of weapons and cut production in order to reduce the risk of war. What would happen if this occurred?

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

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30

70% of the 10 million kilograms of tea produced in India is exported. The UK, Japan, and Germany buy the most. Wholesale prices rose 10% in 2013 as supply was restricted because of a strike. How would these circumstances be shown...

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

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

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