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1

What has an opportunity cost in consumption?

1. The basic economic problem  →  1.3. Opportunity cost

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

Open

2

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 factor?

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

Open

3

The diagram shows the production possibility curve (PPC) for an economy. capital goods O consumer goods X Y Which cost can be determined as the economy moves along its PPC from point X to point Y?

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

Open

4

Which person is most likely to make a microeconomic decision as part of their job?

2. The allocation of resources  →  2.1. Microeconomics and macroeconomics

3. Microeconomic decision makers  →  3.1. Money and banking

Open

5

What necessarily describes the market system?

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

Open

6

The diagram shows the demand for and supply of a product. The original equilibrium is at X. Which point indicates the new equilibrium position if there is an increase in the price of a close substitute for the product while other things remain the same?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.5. Price determination

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7

A firm has the following supply schedule. quantity supplied price ($) What is the price elasticity of supply of the good as the price increases from $5 to $10?

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

Open

8

Why does a government provide certain goods and services in a mixed economic system?

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

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9

A government intends to subsidise bus fares and increase taxes on private motoring. How would this affect the private cost of transport?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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

Open

10

What is not a function of money?

3. Microeconomic decision makers  →  3.1. Money and banking

Open

11

Bus drivers receive a wage of $15 000 a year. The government introduces a national minimum wage. Under which circumstances will the largest number of bus drivers become unemployed as a result of the minimum wage?

3. Microeconomic decision makers  →  3.3. Workers

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12

A clothes retailer borrows money to finance the opening of another clothes shop. Which type of growth is this?

3. Microeconomic decision makers  →  3.5. Firms

4. Government and the macroeconomy  →  4.6. Economic growth

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13

What is meant by internal diseconomies of scale?

3. Microeconomic decision makers  →  3.5. Firms

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

Open

14

A food-processing firm decides to change from a labour-intensive production method to a capital-intensive production method. What is likely to decrease as a result of the change?

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

3. Microeconomic decision makers  →  3.6. Firms and production

Open

15

What is an example of a fixed cost?

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

3. Microeconomic decision makers  →  3.5. Firms

Open

16

What is the definition of profit maximisation?

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

Open

17

The central bank of Mexico set its rate of interest to try to keep the rise in the price level to only 3%. Which government aim was it directly trying to achieve?

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

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18

The table shows a forecast for a government budget for year 1 and for year 2. year 2 $bn year 1 $bn revenue spending What does the forecast government budget for year 2 show?

4. Government and the macroeconomy  →  4.3. Fiscal policy

Open

19

The graph shows the impact of a tax on the supply of petrol . D quantity S2 S1 price O What can be concluded from this graph?

4. Government and the macroeconomy  →  4.3. Fiscal policy

Open

20

What is most likely to result from a successful supply-side policy?

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

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

Open

21

The table shows the rates of unemployment and real GDP growth for an economy in year 1 and year 2. year 2 year 1 −1 rate of unemployment (%) rate of real GDP growth (%) Which combination of policy measures would be most effective in returning the economy to the year 1 level of activity?

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

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22

The table shows selected indicators for the labour market of an economy in year 1 and year 2. year 2 year 1 total labour force employed workers long-term unemployed employment in manufacturing employment in services According to the table, what is the most likely type of unemployment in year 2?

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

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23

The table shows the percentage changes in earnings and consumer prices for four countries in one year. Which country has experienced the greatest increase in real income during the year?

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

4. Government and the macroeconomy  →  4.6. Economic growth

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24

The table shows the distribution of income as measured by GDP for three countries in a year. percentage of GDP received by each 20% of households lowest 20% second lowest 20% middle 20% second highest 20% highest 20% 8.9 14.3 18.0 22.4 36.4 Belgium 5.4 9.4 13.5 20.0 51.7 Mexico 5.1 10.3 15.3 22.4 46.9 US What can be concluded from the table?

5. Economic development  →  5.1. Living standards

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25

The number of people in relative poverty in a country is decreasing. What is the most likely cause of this?

5. Economic development  →  5.2. Poverty

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26

African economies may have rapid economic growth because of a large increase in their working age population. Based on this idea, which factor of production is most likely to grow significantly?

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

4. Government and the macroeconomy  →  4.6. Economic growth

Open

27

Which statement shows two benefits for consumers from specialisation at a national level?

6. International trade and globalisation  →  6.1. International specialisation

Open

28

A multinational company (MNC) opens up a new factory in a host country. What is a possible cost of this new factory to the host country?

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

3. Microeconomic decision makers  →  3.6. Firms and production

Open

29

The diagram shows the change in the exchange rate market for country X’s $. O exchange rate quantity of $ S D1 D2 Which change in country X would have caused this?

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

Open

30

What is the most likely cause of an increased current account surplus in a country?

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

Open