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1

What is a reason why firms making similar products sometimes locate near each other?

3. Microeconomic decision makers  →  3.5. Firms

3. Microeconomic decision makers  →  3.6. Firms and production

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2

The diagrams represent total cost curves (TC) of four firms in the short run. Which firm has only fixed costs?

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

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3

To achieve horizontal integration a record company producing compact discs (CDs) could merge with another firm. What would this firm most likely be doing?

3. Microeconomic decision makers  →  3.5. Firms

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4

What is a difference between a monopoly and a perfectly competitive firm?

3. Microeconomic decision makers  →  3.8. Market structure

3. Microeconomic decision makers  →  3.5. Firms

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5

An entrepreneur started a small business making candles. In the first month 1000 candles were made. The costs were $ raw materials packaging insurance depreciation rent What were the average variable costs for the month?

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

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6

Which aim of government policy is most likely to be achieved by an increase in interest rates?

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

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7

Why might a government encourage a monopoly?

3. Microeconomic decision makers  →  3.8. Market structure

2. The allocation of resources  →  2.10. Market failure

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8

Which combination of government policies is most likely to be successful at reducing unemployment?

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

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9

A government wishes to raise the general standard of living in its country. In the short run, which policy would be the most likely to achieve this aim?

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

4. Government and the macroeconomy  →  4.3. Fiscal policy

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10

Sam wrote a list of how he would prefer to spend his Saturday afternoon. first choice go to a cricket match second choice watch the annual town parade third choice go to the cinema fourth choice visit relatives Unfortunately a thunderstorm caused the cricket match and the town parade to be cancelled. Sam went to the cinema. What was the opportunity cost of going to the cinema?

1. The basic economic problem  →  1.3. Opportunity cost

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11

How does a production possibility curve show that scarcity exists?

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

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

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12

In which case is it possible to set the level of reward before production takes place for the first factor of production but not for the second?

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

3. Microeconomic decision makers  →  3.6. Firms and production

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13

In the 2016 Olympics in Brazil, the opening ceremony will take place in the Maracana Stadium, which can seat 82 000 spectators. It is expected that all tickets for the ceremony will be sold quickly, leaving many people dissatisfied. What can be concluded from this?

2. The allocation of resources  →  2.7. Price elasticity of demand (PED)

2. The allocation of resources  →  2.6. Price changes

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14

The diagrams show different conditions of demand and supply for a product. In which diagram would market price remain unchanged if consumers’ incomes fell?

2. The allocation of resources  →  2.6. Price changes

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15

In 2011, a company selling milk in glass bottles replaced them with new plastic bottles. When they were introduced, the equilibrium quantity on the market fell. What could be a reason for this fall?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.7. Price elasticity of demand (PED)

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16

Which change would make the supply of a product more price elastic?

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

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17

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 involved in this statement?

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

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

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18

Which will encourage domestic producers to grow more maize?

3. Microeconomic decision makers  →  3.6. Firms and production

3. Microeconomic decision makers  →  3.5. Firms

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19

What will be the most likely effect of a fall in interest rates on saving and borrowing?

3. Microeconomic decision makers  →  3.2. Households

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

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20

When will a trade union find it easier to achieve higher wages for its members?

3. Microeconomic decision makers  →  3.3. Workers

3. Microeconomic decision makers  →  3.4. Trade unions

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21

What might be a direct benefit to the individual worker of a specialised job?

6. International trade and globalisation  →  6.1. International specialisation

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22

The table shows the change in real incomes for a number of occupations between 1978 and 2008. occupation change in real income % doctors lawyers accountants bricklayers bus and coach drivers fork-lift truck drivers –5 What can be concluded from the table?

3. Microeconomic decision makers  →  3.3. Workers

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

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23

Which function of money enables people to compare the worth of different products?

3. Microeconomic decision makers  →  3.1. Money and banking

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

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24

Which of the following could not be a reason for imposing tariffs on imported goods?

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

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25

Which of the following is an export of Jamaica?

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

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

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26

A developing country’s two major sources of income from international trade are fishing and tourism. If the country’s exchange rate depreciated, what is likely to happen?

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

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

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27

In some developing countries a large percentage of the population is involved in subsistence farming. What can be concluded from this?

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

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

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28

A country has a falling birth rate and a rising death rate while an increasing number of its working age adults (16-60 years) are seeking employment abroad. How will this probably affect the numbers in the different age groups in the country?

5. Economic development  →  5.3. Population

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29

Which would best indicate the start of an economic recession?

4. Government and the macroeconomy  →  4.6. Economic growth

4. Government and the macroeconomy  →  4.4. Monetary policy

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30

The table shows the change in the labour force in Bangladesh between 2006 and 2009. group 2006 2009 urban male labour force 8.9 9.7 urban female labour force 2.8 3.1 total urban labour force 11.7 12.8 rural male labour force 28.5 30.5 rural female labour force 9.3 10.4 total rural labour force 37.8 40.9 Which statement is most likely to be consistent with these statistics?

3. Microeconomic decision makers  →  3.3. Workers

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

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