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1

Which economic question is least likely to arise as a result of scarcity?

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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2

What is opportunity cost?

1. The basic economic problem  →  1.3. Opportunity cost

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3

The diagram shows a production possibility curve (PPC) for an economy that produces two goods, X and Y. Which point shows the greatest opportunity cost of producing one more unit of good X?

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

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4

A period of bad weather leads to a failure of the rice crop. What is the effect on the market for rice?

2. The allocation of resources  →  2.6. Price changes

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5

The diagram shows a change in demand for coffee. O quantity of coffee demanded per month price of coffee D1 D2 What would cause the demand for coffee to change from D1 to D2?

2. The allocation of resources  →  2.3. Demand

2. The allocation of resources  →  2.6. Price changes

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6

The table shows the supply for a product at different prices. supply price ($) If the price changes from $12 to $14, what will be the change in supply?

2. The allocation of resources  →  2.4. Supply

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7

Which changes would move the equilibrium in the diagram from point X to point Z?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.3. Demand

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8

When the price of shirts rises from $8 to $10, the demand for shirts falls from 1000 to 500. What is the value of the price elasticity of demand for shirts?

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

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9

A government intends to build a new international airport in an area of outstanding natural beauty. What would be an external cost of this decision?

1. The basic economic problem  →  1.3. Opportunity cost

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

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10

What is an important role of a central bank?

3. Microeconomic decision makers  →  3.1. Money and banking

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

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11

How would a change in the demand for labour affect the labour market in an occupation?

3. Microeconomic decision makers  →  3.3. Workers

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

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12

A fast-food multinational bought a food-ordering website, in order to allow the multinational’s customers to download menus and make advance payments. Which term best describes this merger?

3. Microeconomic decision makers  →  3.5. Firms

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13

The diagram shows the average total cost (ATC) for a firm, in the long run. O costs output ATC2 ATC1 What would cause the shift from ATC1 to ATC2?

3. Microeconomic decision makers  →  3.5. Firms

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

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14

What is most likely to encourage capital-intensive production methods in a low-income economy?

3. Microeconomic decision makers  →  3.6. Firms and production

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

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15

A firm’s average revenue is $20. It sells 1000 units. What are the firm’s total revenue and the price of the product?

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

Open

16

A competitive industry becomes a monopoly. What is the most likely advantage for consumers?

3. Microeconomic decision makers  →  3.8. Market structure

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

Open

17

What will cause real GDP to rise in a country?

4. Government and the macroeconomy  →  4.6. Economic growth

5. Economic development  →  5.1. Living standards

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18

What is the money supply?

4. Government and the macroeconomy  →  4.4. Monetary policy

3. Microeconomic decision makers  →  3.1. Money and banking

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19

Which macroeconomic policy is most likely to achieve economic growth and price stability at the same time?

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

4. Government and the macroeconomy  →  4.3. Fiscal policy

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20

What is the definition of economic growth?

4. Government and the macroeconomy  →  4.6. Economic growth

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21

What causes cyclical unemployment in a recession?

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

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22

The table shows government expenditure and revenue in selected years. tax revenue $bn government expenditure $bn year What might explain the changes in the government’s budget over the period?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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23

The table shows changes in economic policies for four countries, A, B, C and D. Which country is most likely to be following a policy of preventing deflation?

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

4. Government and the macroeconomy  →  4.4. Monetary policy

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24

Workers in Switzerland earn more on average than workers in Mexico. What is a likely cause of this?

3. Microeconomic decision makers  →  3.3. Workers

5. Economic development  →  5.1. Living standards

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25

The table contains details on birth rate, death rate and net migration for several countries in a year. net migration death rate birth rate 850 000 30 000 –300 000 4 500 000 Australia Brazil Nigeria US What can be concluded from the table?

5. Economic development  →  5.3. Population

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26

Which combination best describes the characteristics of a high-income economy?

5. Economic development  →  5.1. Living standards

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27

What might encourage international specialisation between countries?

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

6. International trade and globalisation  →  6.1. International specialisation

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28

A government wishes to stop the dumping of a specific imported good at a very low price. Which method of protection would be most effective?

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

Open

29

The price of the US dollar in terms of other currencies is set by the forces of demand and supply. To what does this statement refer?

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

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30

The diagram shows the value of a country’s exports and imports of goods over five years. $m exports of goods imports of goods key year Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods?

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

2. The allocation of resources  →  2.6. Price changes

Open