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1

A power station was built to provide electricity to rural villages in Namibia. What was its opportunity cost?

1. The basic economic problem  →  1.3. Opportunity cost

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

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2

Using all available resources, an economy produces different combinations of two types of goods, clothes and food, shown...

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

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3

What is most likely to reduce the supply of factors of production in an economy?

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

The government of a developed country subsidises local private businesses, and encourages large foreign companies to locate in the country. Which type of economic system is this?

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

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5

What would cause a movement down the demand curve for cars?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.3. Demand

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6

An area attracts tourists to see rare animals but the tourists have few hotels in which to stay. The local government has given permission for a developer to build a hotel. Conservationists say that the area will be ruined as the animals will move away and the nature of the area will be changed. What is likely to happen as a result of this decision to the private benefit of the tourists and the external cost?

1. The basic economic problem  →  1.3. Opportunity cost

2. The allocation of resources  →  2.10. Market failure

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7

Russia is the world’s third largest exporter of grain but much of the country’s farmland was damaged by fire in 2010. How would this be represented on demand and supply diagrams for the Russian grain market and for a country importing Russian grain?

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.3. Demand

2. The allocation of resources  →  2.4. Supply

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8

What may cause an individual to save a higher proportion of their income?

3. Microeconomic decision makers  →  3.2. Households

2. The allocation of resources  →  2.3. Demand

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9

Why are unskilled workers paid less than skilled workers?

3. Microeconomic decision makers  →  3.3. Workers

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10

Between 2009 and 2010 the number of potential jobs for qualified law students fell by 16%. During the same period the total number of applicants for places on law courses increased. What is the most likely explanation for this?

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

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11

A trade union is negotiating a wage rise for its members. What will increase the chance of the wage rise being granted?

3. Microeconomic decision makers  →  3.4. Trade unions

3. Microeconomic decision makers  →  3.3. Workers

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12

Which type of economy of scale results from a firm producing a diverse range of products?

3. Microeconomic decision makers  →  3.5. Firms

3. Microeconomic decision makers  →  3.6. Firms and production

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13

A market changes from perfect competition to monopoly. What is likely to happen in this market?

3. Microeconomic decision makers  →  3.8. Market structure

2. The allocation of resources  →  2.10. Market failure

2. The allocation of resources  →  2.6. Price changes

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14

The diagram shows the fixed costs, variable costs and total costs of a firm. P Q R S costs output O Which distance represents the firm’s fixed costs?

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

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15

When it produces 100 units, a firm’s total variable cost is $300 and its total fixed cost is $2700. What is the average cost?

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

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16

Which are two aims that a Government normally pursues when managing the performance of the whole economy?

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

4. Government and the macroeconomy  →  4.4. Monetary policy

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17

The Mexican government has passed a law which prevents any monopoly charging a price significantly above its production costs. Any monopoly that breaks the law is fined. Which type of policy measure is this?

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

4. Government and the macroeconomy  →  4.3. Fiscal policy

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18

Governments aim to encourage stable prices because inflation can result in a current account deficit on the balance of payments. How does high inflation contribute to a current account deficit?

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

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19

A government collects the following revenue in a year. $m taxes on goods taxes on income taxes on services customs and excise duties What is the amount of indirect tax revenue?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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20

What is the definition of inflation?

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

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21

It was reported in 2011 that an economy had negative economic growth for six months in a row. What would be evidence for such a situation?

4. Government and the macroeconomy  →  4.6. Economic growth

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22

The diagram shows the rate of unemployment and the periods of recession in Britain between 1978 and 2012. Britain’s unemployment rate % key recession years What can be concluded from the diagram?

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

4. Government and the macroeconomy  →  4.6. Economic growth

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23

In which case is success for the government in achieving the first aim likely to cause problems in achieving the second?

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

4. Government and the macroeconomy  →  4.6. Economic growth

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24

Which statement about poverty is correct?

5. Economic development  →  5.2. Poverty

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25

Developing countries often wish to prevent the population in rural areas moving to the towns. Investment grants are given to companies if they set up their businesses in rural areas. What is this policy intended to achieve?

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

4. Government and the macroeconomy  →  4.6. Economic growth

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26

The table shows data collected in 2010 for the average number of children a woman gave birth to and the education she received during her lifetime. education received average number of children none 4.5 primary school level 3.0 secondary school level 2.0 university level 1.7 What can be concluded from this information?

5. Economic development  →  5.3. Population

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27

The table gives information about four countries. Which country has the lowest standard of living?

5. Economic development  →  5.1. Living standards

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28

The Sri Lankan government decides to offer financial support to local firms. Of what is this an example?

3. Microeconomic decision makers  →  3.5. Firms

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

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29

In 2012 the UK held the Olympic Games which attracted a large number of visitors from foreign countries. Which item of the UK’s current account balance will have benefitted directly from this event?

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

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

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30

Countries in Europe were in a recession in 2012. Usually a recession would mean oil prices fall. In fact in 2012, oil prices rose. Which international events might have explained these changes?

4. Government and the macroeconomy  →  4.6. Economic growth

2. The allocation of resources  →  2.6. Price changes

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