economics

1. why will scarcity always exist?
a there are high costs of production.
b_ there are low levels of education.
c_ there are unlimited resources.
d_ there are unlimited wants.

2 a student decides to take up a two-year apprenticeship for which she will earn $10 000 per year.
after that, she expects to earn $25 000 per year. she could take an unskilled job which pays
$16 000 per year instead of the apprenticeship.

what is the opportunity cost in the two years of completing the apprenticeship?
a $10000 b  $12000 c $25000 d $32000

3. the diagram shows a country’s production possibility curve (ppc).
capital p
goods
br ptecneeteeercrnecneeey
o svq
consumer goods
which current combination of capital and consumer goods would produce the greatest number of
consumer goods in the future?
a oandq b pando c rands d uandv

4 what is not a macroeconomic topic?
a __ the growth in chinese gross domestic product
b _ the level of consumer prices index inflation in the uk
c the level of unemployment in spain
d the total output of the german car industry

5 what is likely to cause an extension in demand for a firm’s fruit drink?
a_ a period of hot weather
b_areduction in the cost of producing the drink
c_arival firm leaving the market
d_ asuccessful advertising campaign by the firm

6 supermarkets sell petrol (gas) outside their stores. they reduce the price of petrol below other
suppliers to attract more customers to buy goods in the store when they buy more petrol.
if this were successful, how might it be shown on demand and supply diagrams?
: demand and supply diagram for the
| | demand and supply diagram for petrol store’s goods
a shift of the demand curve to the left shift of the supply curve to the left
b shift of the demand curve to the right shift of the demand curve to the left
cc shift of the supply curve to the left shift of the supply curve to the right
d shift of the supply curve to the right shift of the demand curve to the right

7 which statement describes a market in disequilibrium?
a excess demand results from a government maximum price below the equilibrium price.
b_ the point where the demand and supply curves cross.
c_ price changes cause further changes in both demand and supply.
d_ the quantity demanded by consumers equals the quantity supplied by producers.

8 in response to an increase in price from $5 per kg to $6 per kg, a farmer increased supply from
400 kg to 500 kg per week.
what is the price elasticity of supply?
a 08 b 09 cc 1.2 d 1.25

9 which government measure is most likely to cause a fall both in price and in quantity traded?
a indirect tax
b = maximum price
c minimum price
d subsidy

10 the diagrams show the wage rates of cleaners (owc) and nurses (own).
cleaners nurses
wage ss wage s
t t
rates rates {ns
im erent rer rerieitiona a a
wc }---------3
d d
o employment o employment
what is the result if a national minimum wage of om is introduced?
wage rates | wage rates
of cleaners of nurses
a fall rise
b | nochange fall
cc rise fall
d rise no change

11. what would cause a decrease in spending by households in a country?
a areduction in disposable income
b_areduction in the rate of sales tax
c lower interest rates
d lower savings

12. which combination shows the advantages of a small firm over a larger firm?
better greater
a 5 lower average cost
communication independence
a no no yes
b no yes no
c yes yes no
d yes yes yes

13 what is a variable cost for a firm?
a the cost of raw materials
b the interest payment on existing loans
c_ the rent on the factory
d the insurance on the factory buildings

14 the table shows the daily average revenue and units of output sold for a firm producing bicycles
over a five day period.
revenue ($) | output sold

1 200 2

2 160 4

3 120 8

4 80 14

5 40 16
what can be concluded from the table?
a the firm's highest total revenue occurs at 2 units of output sold.
b_ the firm's highest total revenue occurs at 14 units of output sold.
c_ the firm's prices are always greater than total revenue.
d_ the firm's total revenue always increases as output rises.

15 which function of money acts as a measure of value?
a amedium of exchange
b-astandard of deferred payment
c_ astore of wealth
d = aunit of account

16 what are the features of a highly competitive market when compared with a monopoly market?
we [a]
a higher higher
b higher lower
c lower higher
d lower lower

17 what is not a role of central government in a mixed economy?
a providing demerit goods
b providing merit goods
c providing public goods
d - stabilising the economy

18 a government wishes to prevent deflation.
which combination of policies would be the most effective in achieving this aim?
|| trie | seen
spending
a increase increase
b increase reduce
cc reduce increase
d reduce reduce

19 the diagram shows the impact of a tax introduced on a product.
s;
price s;
e
f paar.
p, sro e wn alae et >
hg
i. d
oo q, q,
quantity
which area represents the amount of tax paid by the consumer?
a hp,fg b hp,eg c op,eq, d p,p,ef

20 which statement about supply-side policy is correct?
a it aims to increase the productive potential of the economy.
b it aims to increase total demand in the economy.
c_itinvolves changes in the equilibrium foreign exchange rate.
d_ it involves changes in the rate of interest.

21. which change is most likely to cause faster economic growth in the short run?
a _anincrease in net emigration
b_anincrease in the birth rate
c_anincrease in the death rate
d_anincrease in the retirement age

22 how is the pattern of employment likely to change when a country becomes more developed?
a __ from rural employment to urban employment
b_ from skilled employment to primary employment
c_ from technical employment to manual employment
d from tertiary employment to secondary employment

23 which item is least likely to be included in the consumer prices index (cpi)?
a_ domestic cooking oil
b homemade clothes
cc milk
d personal mobile phones

24 the table shows statistics for four countries a, b, c and d.
according to the data provided, which country has the lowest standard of living?
average years of life expectancy gdp per head
schooling (years) ($)
a 6 45 200
b 7 47 200
cc 9 60 220
d 12 59 1500

25 economic development in country x has progressed at a greater rate than in country y.
what is the most likely explanation of this difference in economic development between country x
and country y?
a country x has a higher level of spending on education than country y.
b country x has a higher level of unemployment than country y.
c country y has a higher level of investment spending than country x.
d country y has a higher level of spending on healthcare than country x.

26 arise in which factor would cause an increase in the population growth rate of a country?
a birth rate
b_ death rate
c infant mortality rate
d_ net emigration

27 the diagram shows the market for an imported good with equilibrium at point x.
the country imposes a tariff on this good.
is the new equilibrium at point a, b, c or d?
price s,
b
a
is)
xx
s,
cc
b, 2»
° quantity

28 the diagram shows the market for the chinese yuan (¥) priced in us dollars ($).
s;
price of ¥
(in terms of $)
d,
dz
o quantity of ¥
what could have caused the change in demand for the yuan from d, to d5?
a adecrease in foreign direct investment in china
b_ adecrease in the level of tariffs levied by china on imports
c_anincrease in the buying of yuan by central banks
d_anincrease in the chinese rate of interest

29 the table shows the average exchange rate of the uk pound (£) to the us dollar ($), that is the

amount of $ that can be bought with £1.

ear exchange rate

y uke/us$

1 1.64

2 1.52

3 1.35

4 1.25
what is a likely effect of this change on the uk economy?
a decreased cost-push inflation
b_ decreased current account deficit
c increased quantity of imports
d increased trade deficit

30 the table shows components of japan’s current account balance in trillion yen (¥) for 2 years.
balance of balance of balance of
balance of goods ‘ : : :
year services primary income _ | secondary income
= hallie ¥ trillion ¥ trillion ¥ trillion

1 -1.61 -1.76 14.04 -1.11

2 —5.23 —2.33 13.55 -1.02
which balance improved between year 1 and year 2?
a balance of goods
b _ balance of primary income
c balance of secondary income
d balance of services

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