Cambridge IGCSE Economics 0455 — 2009 May/June Paper 1 · Variant 1
0455/11/M/J/09 · 30 questions · 30 marks · ≈34 min
The question paper and its mark scheme, free to read here and free to download. This is Cambridge’s own paper, exactly as it was sat.
Question paper8 pages
Mark scheme2 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · What is the basic economic problem facing all societies?
1 What is the basic economic problem facing all societies? A how to achieve price stability B how to keep employment levels high C the extent to which incomes should be redistributed D what will be produced, how and for whom
Mark scheme: D
Q2 · A major airline needs a range of people and equipment
2 A major airline needs a range of people and equipment. These can be divided into factors of production. Which is allocated to its correct factor of production? people or equipment factor of production A aircraft capital B computer network land C pilots enterprise D shareholders labour
Mark scheme: A
Q3 · Commercial companies are cutting down tropical rainforests for hardwood timber
3 Commercial companies are cutting down tropical rainforests for hardwood timber. What is the opportunity cost to society of this activity? A tax revenue from the sale of the timber B the environment that is destroyed C the products made from the timber D the profits of the companies
Mark scheme: B
Q4 · Who is definitely employed in the primary sector?
4 Who is definitely employed in the primary sector? A a person in a firm producing goods for other firms to use B a person in a firm engaged in agricultural production C a person in an organisation which first deals with any imports into the country D a person in the head office of a company
Mark scheme: B
Q5 · Which argument can be used in favour of the market economy?
5 Which argument can be used in favour of the market economy? A It enables consumers to show their preferences for goods. B It ensures that all capital resources are used. C It guarantees full employment. D It leads to an equal distribution of wealth.
Mark scheme: A
Q6 · The market for a good was in equilibrium
6 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? A The demand curve moved to the left. B The demand curve moved to the right. C The supply curve moved to the left. D The supply curve moved to the right.
Mark scheme: C
Q7 · It was reported in 2002 that South Africa, a mixed economy, would face sharp increases in…
7 It was reported in 2002 that South Africa, a mixed economy, would face sharp increases in air and water pollution unless action was taken to develop environmentally friendly policies for its citizens. Why is a mixed economy thought to be a satisfactory means of achieving environmentally friendly development? A because all development is paid for by the government B because it allows external costs to be considered C because it ensures development at lowest cost D because it is the most productive system
Mark scheme: B
Q8 · It was reported that a company producing designer clothes had increased its revenue by 20…
8 It was reported that a company producing designer clothes had increased its revenue by 20 % at a time when it decreased its prices. What does this suggest about the demand for these goods at that time? A It was perfectly price elastic. B It was perfectly price inelastic. C It was price elastic. D It was price inelastic.
Mark scheme: C
Q9 · Which costs will be reduced if a factory decreases the amount of pollution it causes to…
9 Which costs will be reduced if a factory decreases the amount of pollution it causes to the environment? A average costs B external costs C fixed costs D variable costs
Mark scheme: B
Q10 · What function does a central bank provide for the general public?
10 What function does a central bank provide for the general public? A accepting deposits B issuing banknotes C making loans D providing overdrafts
Mark scheme: B
Q11 · A person is keen to repay a large debt owed on his credit card
11 A person is keen to repay a large debt owed on his credit card. What is likely to cause that person to reduce the credit card repayment and spend more from his weekly wage? A an increase in interest rates B an increase in the price of essential products C an increase in the range of products available D an increase in weekly earnings
Mark scheme: B
Q12 · Why are farm workers likely to be paid a lower wage rate than workers in manufacturing?
12 Why are farm workers likely to be paid a lower wage rate than workers in manufacturing? A Farm workers are more likely to be in a trade union. B Farm workers are more likely to have a shorter working life. C Farm workers are more likely to have poorer working conditions. D Farm workers are more likely to produce goods with a lower value.
Mark scheme: D
Q13 · Three doctors decide to work together in one health centre
13 Three doctors decide to work together in one health centre. What form of business organisation are they most likely to choose? A a partnership B a private company C a public company D a public corporation
Mark scheme: A
Q14 · How does a firm guarantee that it makes the maximum profit?
14 How does a firm guarantee that it makes the maximum profit? A by maximising the difference between its total revenue and total cost B by maximising the number of goods that it sells C by minimising the amount of goods that it keeps in stock D by minimising the difference between average revenue and average cost
Mark scheme: A
Q15 · Some travellers complain about the disturbance caused when other people use their mobile…
15 Some travellers complain about the disturbance caused when other people use their mobile (cell) phones. As a result, a UK train operator announces that it will buy some new trains that will have a device fitted to prevent the use of mobile (cell) phones. What will definitely happen to the train operator? A Its average revenue will decrease. B Its total revenue will increase. C Its fixed cost will increase. D Its total cost will decrease.
Mark scheme: C
Q16 · Which is a diseconomy of scale?
16 Which is a diseconomy of scale? A Bulk buying reduces costs. B Communications deteriorate. C Employees are more motivated. D Technological improvements take place.
Mark scheme: B
Q17 · The diagram shows the fixed costs, variable costs and total costs of a firm
17 The diagram shows the fixed costs, variable costs and total costs of a firm. 60 50 40 costs 30 ($000) 20 10 0 100 units What is the firm’s variable cost at an output of 100 units? A $500 B $10 000 C $50 000 D $60 000
Mark scheme: C
Q18 · What is likely to increase with economic growth?
18 What is likely to increase with economic growth? A cyclical unemployment B income per head C the budget deficit D the conservation of natural resources
Mark scheme: B
Q19 · A government decreased the tax on all goods imported into the country
19 A government decreased the tax on all goods imported into the country. What is the most likely result of this? A a decrease in domestic production B an increase in economic growth C an increase in exports D an improvement in the balance of trade in goods
Mark scheme: A
Q20 · Changes in demand mean that the government of Bangladesh hopes to switch some production…
20 Changes in demand mean that the government of Bangladesh hopes to switch some production from clothes made by low-paid, unskilled workers to medicines produced by highly-trained technicians. What policies would enable Bangladesh to achieve this switch in employment and production? A demolish clothes factories and decrease imports B encourage immigration of foreign labour and introduce tariffs on clothing C invest in education and purchase new machines D substitute labour for machines and encourage emigration of workers from Bangladesh
Mark scheme: C
Q21 · What is not an important step in the construction of an accurate Retail Price Index?
21 What is not an important step in the construction of an accurate Retail Price Index? A choosing a base year with normal economic conditions B comparing price rises with those of international competitors C sampling prices from a wide range of retail outlets D selecting a typical basket of goods consumed by the average citizen
Mark scheme: B
Q22 · The table shows the percentage changes in earnings and consumer prices for four countries…
22 The table shows the percentage changes in earnings and consumer prices for four countries for one year. Which country is likely to have experienced the greatest increase in real income during the year? country earnings consumer prices A France +12.5 +9.5 B Japan +4.0 +2.0 C UK +8.5 +5.0 D Germany +4.0 +4.0
Mark scheme: C
Q23 · What might cause a decline in economic output?
23 What might cause a decline in economic output? A a decrease in income tax B a decrease in sales tax C an increase in company investment D an increase in unemployment
Mark scheme: D
Q24 · A closed economy has both a private sector and a public sector
24 A closed economy has both a private sector and a public sector. Gross Domestic Product (GDP) consists of total consumer expenditure plus gross investment plus A the value of exports. B the value of exports minus the value of imports. C total government expenditure. D total government expenditure minus total taxation.
Mark scheme: C
Q25 · What is most likely to cause an immediate decrease in the size of the working population?
25 What is most likely to cause an immediate decrease in the size of the working population? A a fall in the average size of families B a fall in the birth rate C a reduction in the age of retirement D an increase in net immigration
Mark scheme: C
Q26 · What is least likely to be found in a typical developing country?
26 What is least likely to be found in a typical developing country? A Ill-health affects many of the population. B Many workers are highly skilled. C Production is labour-intensive. D There is an unequal distribution of income and wealth.
Mark scheme: B
More questions on Differences in economic development between countries
Q27 · Which statement about economic development is correct?
27 Which statement about economic development is correct? A A country needs more than a high GDP to be considered developed. B A country which has rich reserves of raw materials is classed as developed. C A country will have no people living in poverty when it is developed. D A country with a trade surplus is considered to be developed.
Mark scheme: A
More questions on Differences in economic development between countries
Q28 · What is not an advantage of specialisation and division of labour?
28 What is not an advantage of specialisation and division of labour? A A product is manufactured in separate stages, making it easier to use machinery. B Some workers become more dependent on other workers. C Workers complete a limited range of tasks and become more efficient at them. D Workers spend less time moving from one task to another.
Mark scheme: B
Q29 · A large amount of the agricultural products in a country were damaged by floods
29 A large amount of the agricultural products in a country were damaged by floods. What is likely to have happened to the price of agricultural products and the volume of imports of agricultural products? price of products volume of imports A fall fall B fall rise C rise fall D rise rise
Mark scheme: D
Q30 · What would be least likely to limit international trade?
30 What would be least likely to limit international trade? A border restrictions on movement B common regulations in different countries C complicated customs procedures D poor information on international markets
Mark scheme: B
What was in this paper
The subtopics covered by these 30 questions, and how many questions each got. Open one in a new tab to see every Cambridge question on it.
3Differences in economic development between countries2Economic growth2Firms’ costs, revenue and objectives2Globalisation, free trade and protection2The factors of production2Workers2Employment and unemployment1Firms1Firms and production1Households1Inflation and deflation1International specialisation1Living standards1Market economic system1Money and banking1Opportunity cost1Price changes1Price elasticity of demand (PED)1Supply1Supply-side policy1The nature of the economic problem1What you needed in this session
Cambridge’s own grade thresholds for 2009 May/June, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.