---

---

1

What is the cause of economic scarcity?

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

2. The allocation of resources  →  2.10. Market failure

Open

2

How is an immediate effect of an increase in unemployment illustrated on a production possibility curve diagram?

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

Open

3

What is a factor of production?

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

3. Microeconomic decision makers  →  3.6. Firms and production

Open

4

A supply curve shows the link between the quantity supplied and A demand. B equilibrium output. C the price of the product. D the scale of production.

2. The allocation of resources  →  2.4. Supply

2. The allocation of resources  →  2.6. Price changes

Open

5

Which headline could apply to a mixed economy but not a free market economy?

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

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

Open

6

In 2012 the local government of a city decided to increase parking charges for motorists. It was intended to raise money to correct a deficit in the local government’s budget. The local government said if they did not increase charges they would not be able to provide all their current services. Businesses complained about the likely loss of revenue if parking charges were increased. Which concepts does this statement involve?

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

2. The allocation of resources  →  2.10. Market failure

Open

7

In 2011 the US Government declared that the country must increase the manufacture of fuel from crops such as corn that have previously only been used for food. What is likely to happen in the market for corn?

2. The allocation of resources  →  2.3. Demand

2. The allocation of resources  →  2.4. Supply

Open

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

Open

9

In a particular industry, male workers on average are paid more than female workers. What might explain this?

3. Microeconomic decision makers  →  3.3. Workers

Open

10

In South Africa, the rate of consumer spending is relatively high compared with other developing countries. However, the unemployment rate is high at 25% and only 27% of students complete the 12 years of basic education. As a result, what is also likely to be found in South Africa?

5. Economic development  →  5.1. Living standards

3. Microeconomic decision makers  →  3.2. Households

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

Open

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

Open

12

When a shoe manufacturer doubles all factors of production output more than doubles. Which economic concept does this illustrate?

3. Microeconomic decision makers  →  3.5. Firms

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

3. Microeconomic decision makers  →  3.6. Firms and production

Open

13

Which market conditions apply to firms that operate in perfect competition and which to a monopoly?

3. Microeconomic decision makers  →  3.8. Market structure

2. The allocation of resources  →  2.6. Price changes

2. The allocation of resources  →  2.10. Market failure

Open

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

Open

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

Open

16

Which policy is an example of an expansionary monetary policy?

4. Government and the macroeconomy  →  4.4. Monetary policy

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

Open

17

What is not a public sector expenditure?

4. Government and the macroeconomy  →  4.3. Fiscal policy

Open

18

Which pair of government actions combines a fiscal policy with a supply-side policy?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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

Open

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

Open

20

Which type of unemployment occurs when the total demand for goods and services in the economy falls?

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

Open

21

Why is the Human Development Index (HDoften considered to be better than GDP per head as a measure of living standards?

5. Economic development  →  5.1. Living standards

Open

22

In 2013 there was a period of low interest rates and high inflation in an economy. Who would be most likely to benefit and who most likely to lose during such a period?

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

3. Microeconomic decision makers  →  3.2. Households

Open

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

Open

24

Which combination of influences must have occurred for a population to be falling when there is no migration?

5. Economic development  →  5.3. Population

Open

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

Open

26

Increasing numbers of qualified medical workers from developing economies migrate to developed economies. What explains this migration?

5. Economic development  →  5.3. Population

5. Economic development  →  5.1. Living standards

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

Open

27

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

5. Economic development  →  5.1. Living standards

Open

28

The citizens of a country which avoids international trade may benefit from A an increase in specialisation. B better political and cultural ties. C competitive pressure to improve the quality of goods. D more employment in their industries.

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

6. International trade and globalisation  →  6.1. International specialisation

Open

29

In 2012, Nokia, a mobile phone manufacturer, produced 18% of Finland’s exports. Why might this be undesirable for Finland?

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

6. International trade and globalisation  →  6.1. International specialisation

Open

30

The table shows the values of the items in a country’s current account in two years. item year 1 ($m) year 2 ($m) balance of goods and services –30 net income –30 –20 net transfers ?

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

Open