economics

1 gdp per capita in switzerland is high.
what is the reason why swiss citizens still face the basic economic problem?
a __ income in switzerland is unevenly distributed.
b inflation in switzerland is high.
c_ swiss citizens expect high living standards.
d_ swiss citizens have to make choices in consumption.

2 the production possibility curve of a country has shifted from ppc, to ppc,.
capital
goods
> ppo
o consumer
goods
what could have caused this shift?
a adecrease in the rate of unemployment
b a fall in the birth rate
c_ improved education
d outdated technology not being replaced

3 what is most likely to increase the geographical mobility of labour?
a_anincrease in the amount of credit available to firms
b_anincrease in the quantity of low-cost housing
c_anincrease in spending by firms on research and development
d_anincrease in spending by government on apprenticeships and training

4 what is not a microeconomic decision?
a_ a firm decides to increase the price of its product.
b  agovernment decides to increase interest rates.
c a household decides to reduce its demand for fuel.
d_ a trade union decides to go on strike.

5 what is a feature of a market in equilibrium?
a demand exceeds supply
b_ no profits are earned
c_ the market will clear
d there will be a surplus of products

6 the diagram shows the supply curve for a good.
price $ ss
y,
x
e) quantity
what is the name and cause of the movement from x to y?
a acontraction of supply caused by a decrease in demand
b-acontraction of supply caused by an increase in demand
c_ anextension of supply caused by a decrease in demand
d_ anextension of supply caused by an increase in demand

7 inthe diagram, which supply curve has the perfectly inelastic supply?
b
* cc
price $
d
ie) quantity

8 the diagram shows the market for petrol (gasoline). s, is the supply of petrol based on the private
cost of petrol production and sg is the supply of petrol based on the social cost of production.
ss sp
price of
petrol
p, ee £-- 4
| d
o 3, q, q,
quantity of petrol
which distance shows the market failure caused by the production of petrol?
a oq, b oq, c qq, d q,q,

9 in agiven year, the world output of coal was 3.94 billion metric tonnes at an average yearly price
of $252 per metric tonne.
several years later, world output was 3.66 billion metric tonnes at an average yearly price of
$120 per metric tonne.
what might have caused such a fall in the price of coal?
a almost half the world’s coal reserves were in just two countries
b__ the exhaustion of coal seams throughout the world
c the switch to renewable sources of energy
d the use of coal as a raw material as well as a fuel

10 a government believes that people eat too much sugar but not enough fruit.
which combination of policies would the government introduce?
ee

a increase its tax increase its tax
b increase its tax subsidise its production
cc subsidise its production increase its tax
d subsidise its production subsidise its production

11. which row shows a characteristic of money and a function of money?
a
a acceptability medium of exchange
b cash measure of value
c divisibility portability
d store of value bank deposit

12 when will a central bank act as lender of last resort to a commercial bank?
a when a commercial bank faces a liquidity crisis
b when a commercial bank fails to make a profit
c when acommercial bank needs to raise share capital
d when a commercial bank reduces its lending rates

13 what is likely to increase the bargaining power of a trade union?
a_ when the economy is experiencing rising cyclical unemployment
b_ when the labour market moves from long-term to short-term contracts of employment
c_ when the price elasticity of demand for the product is price-elastic
d_ when the trade union supplies all the labour required by the employer

14 what is a likely reason why firms do not grow in size?
a_ external diseconomies of scale occur at high levels of output.
b internal economies of scale occur at high levels of output.
c internal economies of scale occur at low levels of output.
d internal diseconomies of scale occur at low levels of output.

15 the table shows the activities of four firms.
shoe website shoe shoe
manufacture design manufacture retailer
which combination of firms would be an example of horizontal integration?
a 1and2 b 1and3 c 2and4 d 3and4

16 what is a reason why firms making similar products sometimes locate near each other?
a competition is decreased.
b_ there are external economies of scale.
c_ there are internal economies of scale.
d_ transport costs may be eliminated.

17 a government wishes to increase its spending on public goods.
which sector should have a spending increase to achieve this?
a education
b healthcare
c national defence
dsrailways

18 which government measure would lead directly to more exports of goods?
a adevaluation of the currency
b arestriction of bank credit creation
c_anincrease in the rate of interest
d the issue of more bank notes and coins

19 a government wishes to stimulate economic recovery.
which action will assist this?
a decreasing government investment
b_ decreasing income tax
c increasing indirect taxation
d increasing interest rates

20 what is the most likely effect on an economy of a successful supply-side policy?
a _anincrease in the general price level
b_anincrease in the interest rate
c_anincrease in the money supply
d_anincrease in the potential gdp

21 acountry is experiencing high economic growth caused by an increase in consumer spending.
what are the most likely effects on inflation and unemployment?
a _ inflation falls and unemployment falls
b _ inflation falls and unemployment rises
c inflation rises and unemployment falls
d _ inflation rises and unemployment rises

22 which pair is most likely to be provided by the private sector in a mixed economy?
a courts and prisons
b hospitals and tax collection
c insurance and banks
d weapon manufacture and defence

23 an economy is experiencing a sustained fall in the general price level.
which term is used to describe this?
a deflation
b_ depreciation
c_ market disequilibrium
d_ recession

24 what is most likely to cause an increase in relative poverty?
a _anincrease in state benefits
b_anincrease in the national minimum wage
c pension increases below the rate of inflation
d people working beyond retirement age

25 what might explain the high population growth in some developing countries?
a high birth rates and falling death rates
b_ low immigration and high emigration
c falling birth rates and rising death rates
d falling life expectancy

26 which combination of factors might cause a country to be classified as developing rather than
developed?
aa government budget deficit and a low death rate
b_ahigh birth rate and a low death rate
calarge population and a current account deficit
d a poor education system and a low standard of living

27 what is certain to encourage a higher level of international trade?
a_ conservation of resources and unstable exchange rates
b_ exploitation of resources and wider use of quotas
c_ increased support for home industries and increased tariffs
d_ more specialisation and falling transport costs

28 the import of a product from another country has been banned.
which term describes this method of protection?
a embargo
b_ exchange control
c quota
d tariff

29 adeveloping country’s two major sources of income from international trade are fishing and tourism.
if the country’s exchange rate depreciated, what is likely to happen?
a imported goods would become cheaper for local people.
b_ the country would definitely become poorer.
c_ the price of fish sold as exports would become cheaper.
d_ tourists to the country would be discouraged by higher prices.

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