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1

Which statement is correct?

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

1. The basic economic problem  →  1.3. Opportunity cost

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2

The economy of country X is always on its production possibility curve (PPC). When will the goods and services produced by country X become more scarce?

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

4. Government and the macroeconomy  →  4.6. Economic growth

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3

What is capital?

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

3. Microeconomic decision makers  →  3.6. Firms and production

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4

What are features of a market economy?

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

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

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5

Public transport and cars are substitute goods. The price of public transport rises. What will happen to the demand for cars?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.3. Demand

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6

The markets of four products are all in equilibrium. The table gives the value of the price elasticity of supply (PES) for each product. The demand for each product shifts to the right by 5000 units at all prices. Which product will have the largest price increase?

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

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7

What is the value of the price elasticity of demand (PED) for a product if total revenue remains the same when the price is reduced?

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

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8

The owner of a hotel in Malaysia finds that the price elasticity of demand (PED) for accommodation in the area is –1.7. If the hotel owner decreases the price of a room by 5%, how would the demand for a room change?

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

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9

Good weather results in an increase in the demand for tomatoes. It also increases the supply of tomatoes. What must be a result of this?

2. The allocation of resources  →  2.6. Price changes

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10

What causes a change in the price of a product in a free market economy?

2. The allocation of resources  →  2.6. Price changes

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11

The ways of making and receiving payments continue to develop. Payments can now be made using smartphones, as well as cash, debit cards and credit cards. Which method of paying for products provides no information to sellers about their customers?

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12

In most countries, which organisation controls the banking system?

3. Microeconomic decision makers  →  3.1. Money and banking

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13

What is not a reason for differences in the earnings of airline pilots in a particular country?

3. Microeconomic decision makers  →  3.3. Workers

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14

An airline takes over an online clothing company. What is an advantage of such a move by the airline?

3. Microeconomic decision makers  →  3.5. Firms

6. International trade and globalisation  →  6.1. International specialisation

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15

In which type of industry is a firm most likely to make a large profit in the short run and in the long run?

3. Microeconomic decision makers  →  3.5. Firms

3. Microeconomic decision makers  →  3.8. Market structure

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16

A firm produces five units of output at an average cost of $20 per unit. The cost of the sixth unit is $26. What is the average cost of six units?

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

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17

What is an example of government macroeconomic policy?

4. Government and the macroeconomy  →  4.3. Fiscal policy

4. Government and the macroeconomy  →  4.4. Monetary policy

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18

Why would devaluing the international value of an economy’s currency help reduce unemployment?

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

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

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19

What is likely to happen when the rate of interest increases?

3. Microeconomic decision makers  →  3.2. Households

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

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20

What is not a supply-side policy measure?

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

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21

The table shows the real GDP per head for a country in 2021 and 2022. $21000 $20000 What is most likely to have changed between 2021 and 2022?

5. Economic development  →  5.1. Living standards

4. Government and the macroeconomy  →  4.6. Economic growth

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22

Which change to fiscal policy is most likely to reduce cyclical unemployment in an economy?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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

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23

What must have happened in a country when it experienced an annual rate of inflation of 100%?

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

3. Microeconomic decision makers  →  3.1. Money and banking

4. Government and the macroeconomy  →  4.4. Monetary policy

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24

The Human Development Index (HDcan be used to measure human development in countries. Which measure would not be part of its calculation?

5. Economic development  →  5.1. Living standards

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25

What is the most likely consequence of an ageing population for a high-income economy?

5. Economic development  →  5.3. Population

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

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26

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

3. Microeconomic decision makers  →  3.6. Firms and production

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

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27

A small country whose only export is oil decides to reduce substantially the rate at which it extracts its limited oil reserves. What is the most likely reason for this decision?

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

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

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

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28

Country X believes that country Y is selling steel at prices below the average cost of production. So, country X imposes a higher tariff on steel imports from country Y. What does country X hope to achieve by imposing this higher tariff?

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

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29

Which factor would cause a country’s exchange rate to fall?

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

4. Government and the macroeconomy  →  4.4. Monetary policy

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30

Many European firms employ workers from the Philippines. These workers send part of their income to relatives in the Philippines. In which part of the balance of payments current account for the Philippines would these transactions be recorded?

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

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