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1

Each factor of production earns an income. What correctly identifies the income for labour and capital?

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

3. Microeconomic decision makers  →  3.3. Workers

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

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2

What could be the opportunity cost of a nuclear power station?

1. The basic economic problem  →  1.3. Opportunity cost

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

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3

The diagram shows a production possibility curve for maize and cotton. maize cotton O Q S P R Bad weather causes a poor harvest for both crops. Which movement could be used to represent this change?

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

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4

The market for a good was in equilibrium. A change occurred which resulted in a new equilibrium with a higher price for the good and a lower quantity traded. What change would have caused this?

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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5

A demand curve shows the relationship between the quantity demanded and A a change in income B consumer tastes C the supply of the product D the price of the product

2. The allocation of resources  →  2.3. Demand

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6

A government subsidises the production of pineapples. This is likely to A increase the price of pineapples B raise the costs of supplying pineapples C raise revenue for the government D cause the supply of pineapples to increase at every price

2. The allocation of resources  →  2.6. Price changes

3. Microeconomic decision makers  →  3.6. Firms and production

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

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7

What indicates the existence of external costs in an economy?

2. The allocation of resources  →  2.10. Market failure

4. Government and the macroeconomy  →  4.6. Economic growth

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8

What might be a disadvantage to a trade union when arguing for an increase in its members’ pay?

3. Microeconomic decision makers  →  3.4. Trade unions

3. Microeconomic decision makers  →  3.3. Workers

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9

What shows the correct examples of income and wealth?

5. Economic development  →  5.2. Poverty

3. Microeconomic decision makers  →  3.2. Households

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

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10

Nazmin Uddin works in a local office as a secretary three days a week. She lives with her parents in a small apartment. Meer Ali owns a successful fitness centre that employs about twenty people. He owns a large house. Which is most likely to be correct?

3. Microeconomic decision makers  →  3.2. Households

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11

The table shows how household spending changes with income. income ($ per month) spending ($ per month) What is the first level of income shown...

3. Microeconomic decision makers  →  3.2. Households

4. Government and the macroeconomy  →  4.3. Fiscal policy

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12

A survey of managers in the USA revealed that most businessmen feel that a company’s responsibility is ‘to serve the interests of owners, employees, customers and the public’. The idea of profit maximisation, in contrast, implies that a company’s main responsibility should be to the A customers B employees C owners D public

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

2. The allocation of resources  →  2.10. Market failure

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

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13

Some agricultural co-operatives have changed from labour-intensive to capital-intensive methods of production. What might be a cause of this change?

3. Microeconomic decision makers  →  3.6. Firms and production

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

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14

A firm has fixed costs of $200 for its daily output. The table shows its daily total variable costs. output 1 total variable costs ($) What can be concluded about the firm’s average total cost?

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

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15

The table shows the growth rate of output (%) in four sectors of an economy. construction sector % energy sector % manufacturing sector % services sector % first quarter of 2014 0.9 0.1 –0.7 –3.4 second quarter of 2014 0.5 1.6 –0.5 0.5 Which two sectors showed an increase in the growth rate in the first half of 2014?

4. Government and the macroeconomy  →  4.6. Economic growth

3. Microeconomic decision makers  →  3.5. Firms

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16

A government decides to sell the monopoly supply of gas to households to a private firm. How could the government protect the interests of households after selling a large company to the private sector?

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

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

2. The allocation of resources  →  2.10. Market failure

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17

In 2015, 70 000 extra people lost their jobs but total employment rose by 75 000. What could explain this?

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

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18

The table shows taxes as a percentage of Gross Domestic Product (GDP) for four countries. From this information, which country had the highest percentage of direct taxation as a percentage of GDP?

4. Government and the macroeconomy  →  4.3. Fiscal policy

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19

A government gives farmers a subsidy of $5 per kilo to supply food on the open market where X is the original equilibrium position. The effect is illustrated in the diagram. S3 S1 D1 S2 quantity supplied (000 kilos) price ($ per kilo) X What will be the new equilibrium price and quantity supplied as a result of the subsidy?

2. The allocation of resources  →  2.6. Price changes

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

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20

What is involved in the construction of a Retail Price Index?

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

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21

Why is nominal Gross Domestic Product not a good measure to compare the standard of living in a country between two years?

5. Economic development  →  5.1. Living standards

4. Government and the macroeconomy  →  4.6. Economic growth

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22

In 2010 there was an increase in net emigration from Ireland. What is most likely to have caused this increase?

5. Economic development  →  5.3. Population

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

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23

Some goods take a greater percentage of a typical household’s total spending than others. How is this accounted for in the construction of a Retail Price Index?

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

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

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24

Which outcome is least likely to be found with greater economic development?

5. Economic development  →  5.4. Differences in economic development between countries

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

5. Economic development  →  5.3. Population

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25

A government introduces state benefits for the unemployed and increases the top rate of income tax to pay for the benefits. What effect will these changes have on poverty and the tax system?

5. Economic development  →  5.2. Poverty

4. Government and the macroeconomy  →  4.3. Fiscal policy

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26

The chart shows total world carbon emissions in 1995 and predicted emissions by 2035. US 22% W. Europe 17% W. Europe 12% E. Europe 27% E. Europe 19% China 11% China 17% other Asia 6% other Asia 14% Middle East 3% Middle East 5% Africa 3% Africa 8% Japan 7% developing world 27% developing world 50% developed world 50% developed world 73% Latin America 4% US 15% Latin America 6% Japan 4% If the chart proves to be correct, what will have happened by 2035?

4. Government and the macroeconomy  →  4.6. Economic growth

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

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27

What encourages international specialisation?

6. International trade and globalisation  →  6.1. International specialisation

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

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28

A Japanese car manufacturer decided to produce its cars in a factory in Europe. What would not be a reason why they might have chosen to do this?

3. Microeconomic decision makers  →  3.6. Firms and production

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

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29

A government removed the quota on goods imported into the country. What is the most likely result of this?

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

2. The allocation of resources  →  2.10. Market failure

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30

The table shows components of Japan’s current account balance in trillion Yen for 2011 and 2012. year balance of goods ¥ trillion balance of services ¥ trillion balance of current transfers ¥ trillion balance of income ¥ trillion –1.61 –1.76 –1.11 14.04 –5.23 –2.33 –1.02 13.55 Which balance improved between 2011 and 2012?

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

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