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1

To help reduce the price of oil, new supplies are needed. However, objectors oppose exploration of new sites because of the environmental damage it may cause. Why is this statement an example of the basic economic problem?

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

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

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2

What is an opportunity cost for a consumer spending money on a holiday?

1. The basic economic problem  →  1.3. Opportunity cost

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3

Helium is a gas that is limited in supply because it takes thousands of years to form. The US government holds 35% of the world’s supply of helium and has been selling its stocks. Helium is essential in medical scanners. It is also used for party balloons, which is a wasteful alternative use of a valuable good. Which two concepts apply to this statement?

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

2. The allocation of resources  →  2.4. Supply

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4

Which combination of characteristics describes a public good?

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

2. The allocation of resources  →  2.10. Market failure

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5

What is an advantage of a market economy?

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

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

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6

What is a macroeconomic aim of a government?

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

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7

An economy relies on potash to make fertiliser. A new deposit of potash is discovered. Which diagram shows this change in the market for potash?

2. The allocation of resources  →  2.6. Price changes

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8

The table shows the quantity demanded at different prices. price $ quantity demanded For which fall in price is the demand price-inelastic?

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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9

Which government policy will increase productivity?

3. Microeconomic decision makers  →  3.6. Firms and production

4. Government and the macroeconomy  →  4.5. Supply-side policy

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10

The diagrams show the wage rates of cleaners (OWc) and nurses (OWn). O employment M Wc S D cleaners O employment Wn S D nurses M wage rate wage rate What is the result if a national minimum wage of OM is introduced?

3. Microeconomic decision makers  →  3.3. Workers

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11

Which result of increased specialisation in a firm is an advantage for the firm, but a disadvantage for some of the workers in the firm?

6. International trade and globalisation  →  6.1. International specialisation

3. Microeconomic decision makers  →  3.5. Firms

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12

The diagram shows the imposition of a subsidy on a product supplied by a firm. S1 S2 D O G F E J H K L M price quantity Which area represents the total revenue of the firm including the subsidy?

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

2. The allocation of resources  →  2.6. Price changes

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13

The diagram shows the total cost curve for a firm. costs quantity O TC What can be concluded about the firm?

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

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

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14

The table shows the average total cost of a firm over a range of output. output average total cost ($) What happens after 4 units are produced?

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

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15

Two car manufacturers agree to merge. Which outcome would be a disadvantage for customers?

3. Microeconomic decision makers  →  3.5. Firms

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16

An economy recorded a second month of deflation. What does this mean?

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

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17

What is a cause of demand-pull inflation?

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

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18

What is the consequence of economic growth for individuals and for the economy?

4. Government and the macroeconomy  →  4.6. Economic growth

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19

The table shows a government’s receipts from taxation. $m air passenger duty tax on firms’ profits import duty income tax inheritance 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

Which supply-side policy measure would help to match the skills of workers to job vacancies?

4. Government and the macroeconomy  →  4.5. Supply-side policy

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

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21

How is the rate of inflation measured?

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

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23

Which combination of policy measures is most likely to increase the level of employment?

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

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24

Poverty in households may be defined in relative terms. What indicates relative poverty?

5. Economic development  →  5.2. Poverty

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25

What is the effect on an economy of net emigration of people aged 20–40?

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

5. Economic development  →  5.3. Population

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26

The table shows statistics for four countries, A–D. Which country has the lowest standard of living?

5. Economic development  →  5.1. Living standards

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27

A country specialises in the production of steel, toys and textiles. What is a disadvantage of specialisation for the country’s workers?

3. Microeconomic decision makers  →  3.6. Firms and production

6. International trade and globalisation  →  6.1. International specialisation

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28

The diagram shows China’s trade with Brazil for two years. China’s exports China’s imports year 1 year 2 key $ billion What happened to China’s trade balance with Brazil between year 1 and year 2?

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

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29

The US imposed tariffs on cars and motorcycles from Germany. What is the effect of these tariffs?

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

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30

What is an immediate effect for a country of a fall in its foreign exchange rate?

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

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