Cambridge IGCSE Economics 0455 — 2015 Oct/Nov Paper 1 · Variant 1
0455/11/O/N/15 · 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 · A business person employs two people to make sandwiches to sell in a cafe
1 A business person employs two people to make sandwiches to sell in a cafe. As well as labour, which factors of production are involved in this activity? A capital, enterprise and land B capital and land only C capital and enterprise only D enterprise and land only
Mark scheme: A
Q2 · Why is choice an important part of the basic economic problem?
2 Why is choice an important part of the basic economic problem? A Choice is necessary to achieve an equilibrium price. B Limited resources have many uses. C Manufacturers produce a large variety of foods. D The market leads to an unequal distribution of goods.
Mark scheme: B
Q3 · A power plant is built to provide electricity to a rural area in Botswana
3 A power plant is built to provide electricity to a rural area in Botswana. What is the opportunity cost to the local economy of building the plant? A the cost of the building materials B the price of electricity C the school which was not built as a result D the wages of the power plant workers
Mark scheme: C
Q4 · The diagram shows a production possibility curve for an economy that can provide…
4 The diagram shows a production possibility curve for an economy that can provide financial services or agricultural products. The economy is at point X. Bad weather destroys part of the agricultural produce. At which point will the economy be in the diagram? A B financial services X C D O agricultural products
Mark scheme: C
More questions on Production possibility curve (PPC) diagrams
Q5 · In a mixed economy, output is produced by A private enterprise and individuals
5 In a mixed economy, output is produced by A private enterprise and individuals. B the market alone. C the state alone. D the state and private enterprise.
Mark scheme: D
Q6 · The diagram shows a shift in the demand curve for table-tennis balls
6 The diagram shows a shift in the demand curve for table-tennis balls. price D1 D2 O quantity What is the most likely cause for this shift in the demand curve? A a fall in the price of the equipment for substitute games B an increase in the membership of table-tennis clubs C a rise in membership fees of table-tennis clubs D the building of more sports clubs providing table-tennis
Mark scheme: B
Q7 · Air travel and rail travel are substitute forms of transport
7 Air travel and rail travel are substitute forms of transport. The diagram shows the effect of new technology on the market for air travel. S1 S2 price per P1 ticket P2 D O Q1 Q2 quantity of airline tickets What would be the most likely effect on the market for rail transport? A a decrease in demand for rail transport B an increase in the price of rail tickets C an increase in supply of rail transport D an increase in the total income of rail companies
Mark scheme: A
Q8 · A developer built some large houses in a rural area which poorer people could not afford
8 A developer built some large houses in a rural area which poorer people could not afford. The houses destroyed an area of natural beauty. What type of market failure resulted from the development? A ignoring external cost B inequality of income C lack of information D price discrimination
Mark scheme: A
Q9 · A country’s central bank raised the rate of interest from 1% to 4% per year
9 A country’s central bank raised the rate of interest from 1% to 4% per year. How would this change have affected the amount saved and the cost of borrowing by individuals? amount saved cost of borrowing A decreased decreased B decreased increased C increased decreased D increased increased
Mark scheme: D
Q10 · When will a trade union be less likely to be able to achieve a rise in wages for its…
10 When will a trade union be less likely to be able to achieve a rise in wages for its members? A during a recession B in an economic boom C when productivity is rising D where there is a limited supply of labour
Mark scheme: A
Q11 · The table shows how three people spend their income
11 The table shows how three people spend their income. person R person S person T food and clothing 20% 45% 35% entertainment 40% 35% 40% luxury goods 40% 20% 25% Put the three people in the most likely order of their incomes, from the lowest income to the highest income. A R, S, T B S, T, R C T, R, S D T, S, R
Mark scheme: B
Q12 · A market changes from perfect competition to monopoly
12 A market changes from perfect competition to monopoly. What is likely to happen to output and price in this market? output price A decrease decrease B decrease increase C increase decrease D increase increase
Mark scheme: B
Q13 · A company decided to reduce the price of its product by 10%
13 A company decided to reduce the price of its product by 10%. What would happen? A The firm’s costs would decrease if the elasticity of demand was greater than one. B The firm’s profits would increase if the elasticity of demand was greater than one. C The firm’s revenue would increase if the elasticity of demand was greater than one. D The quantity sold would decrease if the elasticity of demand was less than one.
Mark scheme: C
Q14 · The world’s open-cast mining of mineral ores is dominated by a few multinational…
14 The world’s open-cast mining of mineral ores is dominated by a few multinational companies which employ relatively few workers. What does this indicate? A Production is capital-intensive. B Productivity of labour is low. C The market is perfectly competitive. D There is a monopoly of world production.
Mark scheme: A
Q15 · The table shows the information that managers of a company have from a week of business…
15 The table shows the information that managers of a company have from a week of business activity. number of employees 100 average wage $900 value of output $100 000 rent $10 000 raw materials $20 000 Assuming there are no other costs, what is the value of the fixed costs? A $300 B $10 000 C $20 000 D $30 000
Mark scheme: B
Q16 · The diagram shows the percentage of income taken by a tax at different levels of income
16 The diagram shows the percentage of income taken by a tax at different levels of income. % paid in tax tax O income What term is used to describe the tax? A indirect B progressive C proportional D regressive
Mark scheme: D
Q17 · Which statement about the meaning of government economic aims is correct?
17 Which statement about the meaning of government economic aims is correct? A Economic growth means that a country’s real output must rise over time. B Full employment means that no one must be unemployed. C Price stability means that the price of all goods and services must remain unchanged. D Redistribution of income means that everyone must have equal incomes.
Mark scheme: A
Q18 · The diagram shows the imposition of a tax of UZ on a good
18 The diagram shows the imposition of a tax of UZ on a good. St S T U price W V E Y Z D O Qt Q quantity Which area shows the government’s tax revenue? A TUEV B TUEZY C TUWV D TUZY
Mark scheme: D
Q19 · A government decided to increase its spending on building schools and hospitals
19 A government decided to increase its spending on building schools and hospitals. Which aim of government policy is most likely to be achieved by this increase? A a balance of payments surplus B a stronger exchange rate C economic growth D price stability
Mark scheme: C
Q20 · To make Gross Domestic Product a better measure of comparative living standards it needs…
20 To make Gross Domestic Product a better measure of comparative living standards it needs to be adjusted by A deducting the effects of exports and inflation. B deducting the effects of imports and exports. C deducting the effects of population change and exports. D deducting the effects of population change and inflation.
Mark scheme: D
Q21 · What is not involved in the construction of a retail price index?
21 What is not involved in the construction of a retail price index? A a base year B a basket of goods C the income tax rate D the weighting of products
Mark scheme: C
Q22 · What is likely to fall when the rate of unemployment in a country falls?
22 What is likely to fall when the rate of unemployment in a country falls? A business confidence B consumer spending C government budget deficit D government revenue from taxes
Mark scheme: C
Q23 · The table shows the percentage change in earnings and consumer prices for four countries…
23 The table shows the percentage change in earnings and consumer prices for four countries for one year. Which country will have experienced a constant level of real income during the year? consumer earnings prices A 7.5 6 B 5 4 C 3 3 D 0 2
Mark scheme: C
Q24 · How would the proportions of different age groups in the population compare between…
24 How would the proportions of different age groups in the population compare between low-income developing countries and high-income developed countries? Low-income developing countries would have a A higher proportion of the elderly and higher proportion of young people. B higher proportion of the elderly and lower proportion of young people. C lower proportion of the elderly and higher proportion of young people. D lower proportion of the elderly and lower proportion of young people.
Mark scheme: C
Q25 · Which feature would be most helpful in identifying a typical developing country?
25 Which feature would be most helpful in identifying a typical developing country? A the level of Gross Domestic Product B the rate of rural to urban migration C the size of geographical area D the size of the population
Mark scheme: B
More questions on Differences in economic development between countries
Q26 · How is a sharp rise in the price of oil likely to be seen by different oil-consuming…
26 How is a sharp rise in the price of oil likely to be seen by different oil-consuming countries? oil-consuming countries with oil-consuming countries with a low standard of living a high standard of living A desirable and manageable desirable and unmanageable B desirable and unmanageable desirable and manageable C undesirable and manageable undesirable and unmanageable D undesirable and unmanageable undesirable and manageable
Mark scheme: D
Q27 · The diagram shows China’s trade with Brazil for 1999 and 2003 in billions of dollars
27 The diagram shows China’s trade with Brazil for 1999 and 2003 in billions of dollars. 0 1 2 3 4 5 Exports 1999 2003 Imports With reference to the diagram, what happened to China’s trade balance with Brazil between 1999 and 2003? A It experienced a falling surplus. B It experienced a rising deficit. C It moved from deficit to surplus. D It moved from surplus to deficit.
Mark scheme: D
Q28 · The diagram shows the market for imported cars
28 The diagram shows the market for imported cars. S2 S1 price D O quantity of cars Which government action could be shown by the change in the diagram? A an embargo B an exchange rate revaluation (appreciation) C an import tax D a quota
Mark scheme: D
Q29 · What is most likely to encourage international specialisation?
29 What is most likely to encourage international specialisation? A similarities in climate in different countries B the ability to produce products more cheaply than other countries C the discovery of oil in a country that had no oil before D very high international transport costs
Mark scheme: B
Q30 · Turkey’s agricultural sector employs 48% of the country’s workforce, compared with 17% in…
30 Turkey’s agricultural sector employs 48% of the country’s workforce, compared with 17% in the United States (US) and 3.9% in France. What could be concluded from this? A France is likely to import more agricultural produce than the US. B The workers in France are not as productive as those in Turkey. C Total agricultural production is likely to be higher in Turkey than in the US. D Turkey is likely to be less developed than France.
Mark scheme: D
More questions on Differences in economic development between countries
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.
3Inflation and deflation3Differences in economic development between countries2Living standards2Current account of balance of payments1Demand1Employment and unemployment1Firms and production1Firms’ costs, revenue and objectives1Globalisation, free trade and protection1International specialisation1Market failure1Market structure1Mixed economic system1Monetary policy1Opportunity cost1Population1Price elasticity of demand (PED)1Production possibility curve (PPC) diagrams1Supply1The factors of production1The macroeconomic aims of government1The nature of the economic problem1Trade unions1What you needed in this session
Cambridge’s own grade thresholds for 2015 Oct/Nov, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.