Cambridge A Level Economics 9708 — 2024 Oct/Nov Paper 3 · Variant 3

This document has 16 pages. Any blank pages are indicated. IB24 11_9708_33/4RP © UCLES 2024 [Turn over *9794100641* Cambridge International AS & A Level ECONOMICS 9708/33 Paper 3 A Level Multiple Choice October/November 2024 1 hour 15 minutes You must answer on the multiple choice answer sheet. You will need: Multiple choice answer sheet Soft clean eraser Soft pencil (type B or HB is recommended) INSTRUCTIONS  There are thirty questions on this paper. Answer all questions.  For each question there are four possible answers A, B, C and D. Choose the one you consider correct and record your choice in soft pencil on the multiple choice answer sheet.  Follow the instructions on the multiple choice answer sheet.  Write in soft pencil.  Write your name, centre number and candidate number on the multiple choice answer sheet in the spaces provided unless this has been done for you.  Do not use correction fluid.  Do not write on any bar codes.  You may use a calculator. INFORMATION  The total mark for this paper is 30.  Each correct answer will score one mark.  Any rough working should be done on this question paper.

2 © UCLES 2024 9708/33/O/N/24 1 A rational consumer chooses what quantities of two products Y and Z to purchase with a given income. MUY and MUZ are the additions to total utility that would result if the consumer were to purchase an additional unit of each product. PY and PZ are the current prices of the two products. Which outcome would represent consumer equilibrium? A when MUY = MUZ B when MUY  PY = MUZ  PZ C when MUY  PZ = MUZ  PY D it is not possible to tell from the information available 2 Which statement about indifference curves is not correct? A Indifference curves are usually convex to the origin of the diagram. B Indifference curves can intersect each other. C The consumer always prefers a higher indifference curve to a lower one. D The slope of the indifference curve represents the marginal rate of substitution. 3 A firm increases its production. When will this result in allocative efficiency? A when the cost of producing the last extra unit equals the value the consumers place on it B when the cost of producing the last extra unit is at a minimum C when the total cost of production equals the value that consumers place on the total product D when the total revenue reaches a maximum

3 © UCLES 2024 9708/33/O/N/24 [Turn over 4 The table shows a firm’s revenue and costs at different levels of output. output marginal revenue average revenue marginal cost average total cost 1 125 125 90 140 2 85 105 40 90 3 45 85 45 75 4 25 70 95 80 5 20 60 130 90 What is the firm’s total supernormal profit at the profit-maximising level of output? A –15 B 10 C 30 D 120 5 Which diagram shows a monopolistically competitive firm in long-run equilibrium? revenue / cost output MR AR MR AR MC MC AC AC O Qe Qe A revenue / cost output O B revenue / cost output MR AR MR AR MC MC AC AC O Qe Qe C revenue / cost output O D

4 © UCLES 2024 9708/33/O/N/24 6 In a perfectly contestable market, entries and exits are cost-free. In reality, why is this not the case with some firms in contestable markets? A Firms cannot recover all fixed costs if they cease operations. B Firms in the industry all operate at the equilibrium level of output. C Large firms do not have to increase capital to grow. D Multinational companies always benefit from economies of scale. 7 Which points show where each maximisation objective occurs? O cost or price $ quantity L MR AR AC MC J K H revenue maximisation sales maximisation A J L B L K C J K D L H 8 What is an external economy of scale? A cheaper costs from purchasing large quantities of inputs B decreased interest rates on borrowed funds C increased labour productivity D relevant training facilities at a local college

5 © UCLES 2024 9708/33/O/N/24 [Turn over 9 A group of producers enter into an agreement to restrict supply or fix the price of a good. What does this describe? A a cartel B a conglomerate merger C economies of scale D horizontal integration 10 What is meant by a four-firm concentration ratio of 25%? A The largest four firms’ market share totals 25%. B The largest four firms have a market share of 25% each. C There are only four firms in the industry. D The largest firm has a 25% market share. 11 A government decides to use price controls to achieve allocative efficiency in a monopoly market. Which price would need to be set to achieve allocative efficiency? O price MR D = AR MC AC Q1 Q2 Q3 Q4 quantity A B C D

6 © UCLES 2024 9708/33/O/N/24 12 The diagram shows the supply of and the demand for workers in the car manufacturing industry. A trade union successfully negotiates a wage increase from W1 to W2. O wage rate D S L2 L3 L1 W2 W1 quantity of labour What is the likely impact on the level of employment? A fall from L1 to L2 B fall from L3 to L2 C rise from L1 to L3 D rise from L2 to L3 13 A firm buys new machinery which increases the marginal productivity of its workforce. What will be the resulting impact on the market for labour? A a shift to the left in the demand curve for labour B a shift to the right in the demand curve for labour C a shift to the left in the supply curve of labour D a shift to the right in the supply curve of labour

7 © UCLES 2024 9708/33/O/N/24 [Turn over 14 The diagram represents the market for labour. O D number of workers wage S1 S2 W N What would be the effect on transfer earnings and economic rent of a change in the supply curve from S1 to S2? transfer earnings economic rent A fall falls B fall rises C rise rises D rise falls 15 Which combination of policies is most likely to increase the number of low-paid workers caught in the poverty trap? individual’s tax-free allowance for income tax proportion of all benefits that are means-tested A decrease increase B decrease decrease C increase increase D increase unchanged 16 A website compares the prices of groceries. Which function of money is illustrated by this? A medium of exchange B standard of deferred payment C store of value D unit of account

8 © UCLES 2024 9708/33/O/N/24 17 Two statements about the types of unemployment are shown. 1 You will get unemployment if you pay people not to work, and tax them when they do. 2 An individual is actively seeking work but due to negative economic growth cannot find employment. Which row best describes the two types of unemployment in these statements? 1 2 A cyclical structural B voluntary frictional C structural cyclical D voluntary involuntary 18 A government decides to cut the rate of interest in order to stimulate aggregate demand and increase employment. Why might this policy not work in a recession? A Business confidence is low. B It leads to deflation. C It leads to an appreciation in the exchange rate. D It leads to a decrease in the money supply.

9 © UCLES 2024 9708/33/O/N/24 [Turn over 19 Households in an economy change their consumption behaviour causing the consumption curve to shift from C1 to C2. O consumption spending disposable income C2 C1 What has happened to autonomous consumption and the marginal propensity to consume? autonomous consumption marginal propensity to consume A decreased decreased B decreased increased C increased decreased D increased increased 20 How would decreasing interest rates be most likely to reduce unemployment? A by decreasing the borrowing costs of business B by decreasing the government’s budget deficit C by increasing the foreign exchange rate of the currency D by increasing the opportunity cost of spending

10 © UCLES 2024 9708/33/O/N/24 21 The diagram shows a curve representing the relationship between a country’s unemployment rate and its inflation rate. inflation rate O unemployment rate Why is it likely that this curve only applies in the short run? A Any attempt to reduce unemployment will increase inflation. B Increased inflation actually increases unemployment. C Increased inflation leads to expectations of further inflation. D Increased inflation reduces real wage rates, which increases the demand for labour. 22 What is the most likely result of a period of negative actual growth? A an increase in the surplus of the financial account of the balance of payments B an increase in the deficit of the current account of the balance of payments C an increase in the rate of inflation D an increase in the rate of unemployment 23 An economy experiences falling incomes and rising unemployment. The central bank decides to reduce the rate of interest to stimulate economic activity. When would such a policy be most likely to succeed? A when spending by consumers on goods and services is income elastic B when spending by firms on capital goods is interest rate elastic C when the leakage on additional national income is high D when the overseas demand for exports is price inelastic

11 © UCLES 2024 9708/33/O/N/24 [Turn over 24 Monetary policy does not usually work immediately. Which time lag is likely to be the least concern to a government whose priority is a rapid domestic impact? A the time it takes for policymakers to recognise the cause of a problem B the time it takes for the economy to respond to the introduction of the policy C the time it takes for the foreign exchange rate to respond to the effect of the policy D the time it takes to put the chosen policy measure into place 25 The optimum level of population is deemed to be that level at which real output per head is maximised. The diagram shows the relationship between population size and output per head in a country for two different time periods. O Q1 P1 P2 Q2 output per head population output per head year 1 output per head year 2 Which change could not satisfactorily explain the shift from year 1 to year 2? A Population has increased. B State of technology has improved. C Stock of capital has increased. D Volume of productive resources in use has increased. 26 A government wants to reduce the current account deficit on the balance of payments. What is an example of an expenditure-reducing policy? A a devaluation of the currency B a subsidy on domestic production C a tariff on imports D an increase in income taxes

12 © UCLES 2024 9708/33/O/N/24 27 During a year, a country’s national income in money terms increased by 5%, prices increased by 4% and the total population increased by 2%. What was the approximate change in real income per head? A a decrease of 1% B a decrease of 2% C an increase of 1% D an increase of 2% 28 What is most likely to result from foreign direct investment in a developing economy? A an improvement in the developing economy’s trade balance B an increase in the developing economy’s net investment income C a reduction in the developing economy’s government tax revenue D a reduction in wage levels in the developing economy 29 The diagram shows an economy’s Lorenz curve (VW). 0 100 100 W V area Y area Z cumulative % of population cumulative % of income 45° How is the Gini coefficient for the economy calculated? A Z Y Y  B Z Y C Y Z D Z Y Z 

13 © UCLES 2024 9708/33/O/N/24 30 The table gives the percentage of employment in the primary, secondary and tertiary sectors in four countries. Which country is most likely to be a high-income country? primary sector % secondary sector % tertiary sector % A 15 40 45 B 30 40 30 C 35 45 20 D 45 35 20

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This document consists of 3 printed pages. © Cambridge University Press & Assessment 2024 [Turn over Cambridge International AS & A Level ECONOMICS 9708/33 Paper 3 Multiple Choice October/November 2024 MARK SCHEME Maximum Mark: 30 Published This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the examination. Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for Teachers. Cambridge International will not enter into discussions about these mark schemes. Cambridge International is publishing the mark schemes for the October/November 2024 series for most Cambridge IGCSE, Cambridge International A and AS Level components, and some Cambridge O Level components.

9708/33 Cambridge International AS & A Level – Mark Scheme PUBLISHED October/November 2024 © Cambridge University Press & Assessment 2024 Page 2 of 3 Question Answer Marks 1 C 1 2 B 1 3 A 1 4 C 1 5 D 1 6 A 1 7 B 1 8 D 1 9 A 1 10 A 1 11 C 1 12 A 1 13 B 1 14 D 1 15 A 1 16 D 1 17 D 1 18 A 1 19 C 1 20 A 1 21 C 1 22 D 1 23 B 1 24 C 1 25 A 1 26 D 1 27 A 1 28 A 1

9708/33 Cambridge International AS & A Level – Mark Scheme PUBLISHED October/November 2024 © Cambridge University Press & Assessment 2024 Page 3 of 3 Question Answer Marks 29 A 1 30 A 1