Cambridge IGCSE Economics 0455 — 2014 Oct/Nov Paper 1 · Variant 3
0455/13/O/N/14 · 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 paper12 pages
Mark scheme2 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · Which resource is an example of capital used in the fishing industry?
1 Which resource is an example of capital used in the fishing industry? A a fishing boat B fish C owners of firms in the industry D skilled workers in the industry
Mark scheme: A
Q2 · In the diagram, what does the production possibility line PQ illustrate?
2 In the diagram, what does the production possibility line PQ illustrate? P product Y O product X Q A constant opportunity cost B decreasing opportunity cost C diseconomies of scale D economies of scale
Mark scheme: A
More questions on Production possibility curve (PPC) diagrams
Q3 · In recent years more golf courses, which use large quantities of water, have opened in…
3 In recent years more golf courses, which use large quantities of water, have opened in China. What may be the opportunity cost of this? A cost of water B loss of farmland C sales of golf equipment D wages of golf course staff
Mark scheme: B
Q4 · As the demand for new houses increases, the demand for plumbers and electricians also…
4 As the demand for new houses increases, the demand for plumbers and electricians also increases. What does this statement illustrate? A The demand for plumbers and electricians is complementary (joint) demand. B The productivity of plumbers and electricians increases continually. C There is no limit to the number of plumbers and electricians employed. D The supply of plumbers and electricians is totally elastic.
Mark scheme: A
Q5 · What is found in a mixed economy but not in a free market economy?
5 What is found in a mixed economy but not in a free market economy? A equilibrium prices B income tax C small firms D the profit motive
Mark scheme: B
Q6 · A bridge is built over a river which enables journey times to be reduced
6 A bridge is built over a river which enables journey times to be reduced. The table shows costs and benefits from building the bridge. $000 private benefit 12 private cost 10 external benefit 8 external cost 5 Which calculation represents social benefit? A $12 000 – $10 000 = $2000 B $8000 – $5000 = $3000 C $12 000 + $5000 = $17 000 D $8000 + $12 000 = $20 000
Mark scheme: D
Q7 · When personal computers (PCs) were first sold in the 1970s, prices were much higher than…
7 When personal computers (PCs) were first sold in the 1970s, prices were much higher than they are today. What is the most likely explanation? A Both quality and performance of PCs have improved. B Demand has increased due to advertising. C Improvements in technology have led to lower supply costs. D Production requires more spending on research.
Mark scheme: C
Q8 · A group of workers in a firm joins a trade union
8 A group of workers in a firm joins a trade union. What would the union be expected to do? A arrange for labour-saving technology to be introduced B discuss safety issues in the workplace with the employer C ensure job security by promoting the firm’s products through advertising D negotiate new contracts with major buyers of the firm’s products
Mark scheme: B
Q9 · In which occupations do wages tend to be lowest?
9 In which occupations do wages tend to be lowest? A in those where the work is dangerous B in those where there is an excess supply of labour C in those where workers are paid on a monthly basis D in those where workers need long training
Mark scheme: B
Q10 · In 2008, economic conditions in the UK were uncertain and the rate of inflation increased
10 In 2008, economic conditions in the UK were uncertain and the rate of inflation increased. It was reported that consumers had increased their purchases of rare stamps which continued to rise in value. What is not a reason for such purchases? A to avoid risk B to diversify their investments C to overcome the effects of inflation D to switch from spending to borrowing
Mark scheme: D
Q11 · The construction industry in Dubai relies on many migrant workers from India
11 The construction industry in Dubai relies on many migrant workers from India. Which combination of changes in the economies of Dubai and India would be most likely to increase the wages of construction workers in Dubai? Dubai economy Indian economy A decrease in economic activity decrease in economic activity B decrease in economic activity increase in economic activity C increase in economic activity decrease in economic activity D increase in economic activity increase in economic activity
Mark scheme: D
Q12 · What is correct for a private monopoly but is not correct for a firm in perfect…
12 What is correct for a private monopoly but is not correct for a firm in perfect competition? A It aims to maximise its profits. B It can make losses. C It can restrict the level of competition. D It is run by an entrepreneur.
Mark scheme: C
Q13 · What must occur if a firm experiences economies of scale?
13 What must occur if a firm experiences economies of scale? A average costs decrease B profits decrease C the number of workers increases D total advertising costs decrease
Mark scheme: A
Q14 · The diagram shows the cost and revenue curves of a firm which starts to make a profit…
14 The diagram shows the cost and revenue curves of a firm which starts to make a profit only after producing 100 units of output. 1 2 costs and revenue $ 500 0 100 output What are the correct labels for line 1 and line 2? line 1 line 2 A average cost average revenue B total cost total revenue C total revenue total cost D variable cost price
Mark scheme: C
Q15 · The table shows output and total costs of production of a firm with three workers
15 The table shows output and total costs of production of a firm with three workers. output total costs ($) week 1 5 1500 week 2 6 1600 week 3 7 1700 week 4 8 1800 How did output per worker and average cost of the product change over the period? output per worker average cost A decrease no change B increase decrease C increase no change D no change increase
Mark scheme: B
Q16 · A government policy results in an increase in government spending and a fall in the…
16 A government policy results in an increase in government spending and a fall in the market price of a good. What is the government policy? A the application of an indirect tax to a luxury good B the introduction of a subsidy to wheat farmers C the privatisation of health services D the setting of a minimum price for milk
Mark scheme: B
Q17 · What describes a regressive tax?
17 What describes a regressive tax? A It is paid by a higher proportion of high income earners. B It is paid by a higher proportion of low income earners. C It takes a higher proportion from high incomes. D It takes a higher proportion from low incomes.
Mark scheme: D
Q18 · In trying to achieve one of its aims a government may make it difficult to achieve…
18 In trying to achieve one of its aims a government may make it difficult to achieve another aim. What is an example of this conflict? A Achieving a more even distribution of income may prevent a rise in the average standard of living. B Achieving an increase in economic growth may prevent full employment. C Achieving full employment may prevent stable prices. D Achieving steady prices may prevent a current account surplus on the balance of payments.
Mark scheme: C
Q19 · The table shows the tax paid at different levels of income
19 The table shows the tax paid at different levels of income. income amount of tax ($) ($) 6000 600 7000 700 8000 900 9000 1100 Which describes this tax? A progressive at all levels of income B proportional at all levels of income C proportional at lower incomes, progressive at higher incomes D proportional at lower incomes, regressive at higher incomes
Mark scheme: C
Q20 · Which combination of changes could cause a fall in the purchasing power of workers in a…
20 Which combination of changes could cause a fall in the purchasing power of workers in a country? % change in % change in wages rates the price level A –2 –4 B 0 –2 C 4 4 D 4 6
Mark scheme: D
Q21 · What will increase when there is a period of deflation during which the general price…
21 What will increase when there is a period of deflation during which the general price level continues to fall? A confidence of investors B consumer demand C unemployment D wage rates
Mark scheme: C
Q22 · The information below relates to selected countries in 2012
22 The information below relates to selected countries in 2012. consumer prices unemployment rate (annual % change) (%) India +10.0 9.8 Sweden +1.4 8.8 Switzerland –0.4 2.9 Venezuela +22.8 7.4 What can be concluded from this information? A Inflation is a possible cause of unemployment. B Inflation is the only cause of unemployment. C Low unemployment is linked to high inflation. D There is a uniform link between the rate of inflation and unemployment.
Mark scheme: A
Q23 · The table shows the percentage change (%) in employment over a period for a country with…
23 The table shows the percentage change (%) in employment over a period for a country with three economic sectors. (%) change in economic sector employment agriculture –6 manufacturing +2 services +4 What could be concluded from this information? A Agricultural output fell. B The country became more developed. C The working population stayed constant. D Total employment remained the same.
Mark scheme: B
Q24 · As a country develops, what is most likely to happen?
24 As a country develops, what is most likely to happen? A There will be an increase in productivity. B There will be an increase in the birth rate. C There will be an increase in the death rate. D There will be reduced occupational mobility.
Mark scheme: A
More questions on Differences in economic development between countries
Q25 · The diagrams show the approximate age distributions of four economies
25 The diagrams show the approximate age distributions of four economies. Which diagram resembles the age distribution of a developed economy? A B C D 90 90 90 90 age age age age (years) (years) (years) (years) 0 0 0 0 population population population population
Mark scheme: B
Q26 · As a country develops, its provision of medical care for babies and old people improves
26 As a country develops, its provision of medical care for babies and old people improves. Why might this cause a problem in raising living standards? A Gross Domestic Product will fall. B The dependency ratio will become higher. C The number of workers will fall. D The size of families in the short run will be smaller.
Mark scheme: B
Q27 · The table shows statistics for four countries in southern Africa
27 The table shows statistics for four countries in southern Africa. From the information given, which country has the lowest standard of living? average annual population density real GDP life growth rate of per square per capita expectancy population (%) kilometre (US$) A 1.9 19 46 190 B 2.7 2 58 1700 C 3.7 45 59 210 D 4.2 89 44 190
Mark scheme: D
Q28 · Which change would be most likely to cause an increase in the demand for the Turkish Lira?
28 Which change would be most likely to cause an increase in the demand for the Turkish Lira? A increased investments by Turkish firms in Italy B increased profits sent to France by French companies in Turkey C increased purchases of German chemicals by Turkish firms D increased speculation that the value of the Turkish Lira will rise in the future
Mark scheme: D
Q29 · Which change will increase the quantity of a country’s exports?
29 Which change will increase the quantity of a country’s exports? A Foreign governments raise tariff rates. B The country’s exchange rate depreciates. C The level of world income falls. D Transport costs become more expensive.
Mark scheme: B
Q30 · In September 2011 the Brazilian Government increased its tariff on imported Chinese cars
30 In September 2011 the Brazilian Government increased its tariff on imported Chinese cars. Which change might have increased the number of cars Brazil imported from China in October 2011? A a decrease in the quality of cars produced in Brazil B a decrease in the sales tax on cars produced in Brazil C an increase in the costs of producing cars in China D an increase in the value of China’s currency
Mark scheme: A
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.
3Demand2Employment and unemployment2Fiscal policy2Globalisation, free trade and protection2Inflation and deflation2Population2Differences in economic development between countries1Foreign exchange rates1Living standards1Market failure1Market structure1Mixed economic system1Money and banking1Opportunity cost1Price changes1Production possibility curve (PPC) diagrams1The factors of production1The macroeconomic aims of government1The role of government1Trade unions1Workers1What you needed in this session
Cambridge’s own grade thresholds for 2014 Oct/Nov, Paper 1 · Variant 3. A higher threshold means an easier paper — the bar moves with how the cohort did.