economics

1. what is the cause of the economic problem facing the global market for gold?
a consumer wants for gold are limited.
b_ gold is a limited resource.
c only governments can sell gold.
d_ there is an unlimited supply of gold.

2 the management of an airline decided to replace its aeroplanes with more technologically advanced
aircraft. at the same time, the company retrained its pilots.
which factors of production has the airline improved?
a capital and labour
b_capital and land
c labour and enterprise
d land and enterprise

3 the diagram shows the choices for an individual between leisure and earnings.
18
hours of 45
leisure
perday 12
xx
9
y
6
3
0 10 20 30 40 50 60
earnings $
what is the opportunity cost to the individual of the extra earnings when moving from position x to
position y?
a $10
b $40
c 3 hours of leisure per day
d_ 6 hours of leisure per day

4 the world price of cocoa has been falling while the prices of products made from cocoa have been
rising.
which combination might explain this?
advertising expenditure
market for cocoa
on products made from cocoa

a excess demand decrease

b excess supply decrease

cc excess demand increase

d excess supply increase

5 the table shows the amounts demanded and supplied of tomatoes at different prices. the initial
equilibrium is at a price of $40.
price demand supply

($) (kg) (kg)

10 20 2

20 16 5

30 12 8

40 10 10

50 8 12
the following year, more efficient harvesting means that the supply increases by 50% at each price.
what will happen to the suppliers’ total revenue?
a it will fall by $10.
b it will fall by $40.
cit will rise by $10.
dit will rise by $200.

6 a fall in which variable would help eliminate a market shortage?
a quantity demanded
b price
c quantity supplied
d_ the number of firms

7 when the price of meat increased from $5 to $6 per kg, joe decreased his purchase of meat from
40 kg to 20kg a month.
what was joe’s price elasticity of demand for meat?
a 04 b 2.0 c 25 d 20

8 in the diagram, which line represents perfectly inelastic supply?
b
price $ a c
d
o quantity

9 what is external benefit?
a private benefits minus private costs
b private benefits plus social benefits
c social benefits minus private benefits
d social benefits plus social costs

10 what is a function of a commercial bank?
a_ accepting deposits
b_ controlling money supply
c issuing notes and coins
d lending money to the government

11. under which circumstances are households more likely to save?
rate
a high high high
b high high low
c low high low
d low low low

12 acountry wishes to increase the supply of nurses.
what would be the most effective way of achieving this?
a extending the training period for nurses
b_ improving the working conditions of nurses
c increasing the national minimum wage
d_ reducing grants for trainee nurses

13 employers based in large cities often pay employees special allowances above standard pay rates.
what is the most likely reason for this?
a job security and promotion prospects tend to be restricted.
b living costs and transport costs tend to be high.
c_ there are few alternative job opportunities available.
d_ trade unions negotiate nationwide wage levels.

14 workers in a country have been concerned about their wages not keeping pace with inflation.
how can trade unions assist workers in getting a pay rise?
a advise the workers to ask individually for a pay rise
b negotiate on behalf of their members to secure a pay rise
c offer to contribute financially to a pay rise
d request improved working conditions

15 howis total revenue calculated?
a price divided by the total output
b total output divided by the price
c total output multiplied by the price
d total output multiplied by total costs

16 there is a number of cafés selling snacks and drinks in a city centre. several of these cafés close

due to their owners retiring.
what is the likely effect on the prices and profits of the remaining cafés?
ees ts

a decrease decrease

b decrease increase

cc increase decrease

d increase increase

17. what is a macroeconomic aim of government?
a equilibrium prices in markets
b_ high wages
c low inflation
d profit maximisation

18 the table shows earnings and total income tax paid per year.
total income tax paid $

5000 1000
8000 2000
9000 3000

which type of tax system does this illustrate?

a _ indirect

b progressive

c proportional

d_ regressive

19 what is an example of monetary policy?
a_anincrease in government spending
b_anincrease in indirect taxation
c_anincrease in rules and regulations
d_anincrease in the money supply

20 what is gross domestic product (gdp) divided by in order to calculate gdp per head?
a the adult population
b__ the dependent population
c the total population
d_ the working population

21 what is the consequence of economic growth for individuals and for the economy?
se
a increase in absolute poverty increase in inflation
b increase in average incomes increase in government tax revenue
c | increase in the variety of goods and services reduction in exports
d increase in unemployment reduction in the standard of living

22 what does the labour force survey (lfs) measure?
a __ the number of workers on the national minimum wage
b _ the proportion of women in the labour force
c_ the unemployed population
d trade union membership

23 the table shows the weights allocated to the three items in a consumer prices index (cpi) for two
years.
-
item
food 30 35
clothing 20 15
housing 50 50
what can be concluded from this data?
a_ clothing prices have fallen.
b living standards remain unchanged.
c_ the average price level is unchanged.
d_ the proportion of income spent on food has risen.

24 a government increases the rate of progressive income tax and its spending on hospitals.
what is likely to happen to the distribution of income and to living standards?
| | distribution of income living standards
a becomes less even fall
b becomes less even rise
cc becomes more even fall
d becomes more even rise

25 the population pyramids for country 1 and country 2 in a given year are shown.
country 1 country 2
100+ 100+
male 95-99 female male 95-99 female
90-94 90-94
85-89 85-89
80-84 80-84
15-19 15-79
70-74 70-74
65-69 65-69
60-64 60-64
55-59 55-59
50-54 50-54
45-49 45-49
40-44 40-44
35-39 35-39
30-34 30-34
25-29 25-29
20-24 20-24
15-19 15-19
10-14 10-14
5-9 5-9
0-4 0-4
10 8 6 4 2 0 0 2 4 6 8 10 108 6 4 2 0 0 2 4 6 8 10
percentage percentage
what can be deduced from these population pyramids?
a country 1 has a greater population size than country 2.
b country 1 has a higher life expectancy than country 2.
c country 2 has a lower death rate than country 1.
d country 2 spends more money on childcare than country 1.

26 which country would be classified as the most developed based on the data in the table?
gross domestic epulation
product per year ‘millons)
($m)
a 600 3
b 700 2
cc 12000 40
d 15000 100

27 what encourages international specialisation?
a a foreign exchange shortage
b_ diseconomies of scale
c free trade
d quotas

28 a country wants to limit the number of imported cars to a maximum of 100000 in a year.
which measure is most likely to achieve this objective?
a anembargo
b  animport quota
c_animport tariff
da subsidy

29 the diagram shows a change in the exchange rate for the indian rupee against the us$.
price of ss,
indian
rupee __\ s
inusg pt .
pyprseommmnnt oy
i; d
o qi q
quantity of
indian rupees
what could cause the change in the exchange rate?
a adecrease in the rate of inflation in india
b_anincrease in demand for imports by people in india
c greater foreign direct investment into india
d greater purchases of its own currency by the indian central bank

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