Cambridge IGCSE Economics 0455 — 2017 May/June Paper 1 · Variant 3
0455/13/M/J/17 · 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 scheme3 pages
Answers below. Sit the paper first if you are practising.
Questions as text
Q1 · Which statement about factors of production is correct?
1 Which statement about factors of production is correct? A The fruit picked from the tree is called land. B The managers of a company are called enterprise. C The money used to finance a project is called capital. D The owner of a company is called labour.
Mark scheme: A
Q2 · A person can make 10 items to sell on a craft stall in a day
2 A person can make 10 items to sell on a craft stall in a day. What is the opportunity cost if the person decides to paint a picture instead? A 10 craft items B the cost of the materials for the craft items C the cost of the paint for the picture D the value of the picture
Mark scheme: A
Q3 · The diagram shows a production possibility curve for agriculture and machinery
3 The diagram shows a production possibility curve for agriculture and machinery. agriculture L K N M O machinery As a country develops, its primary production decreases and its secondary production increases. Which movement would represent this change? A K to L B L to N C M to N D N to L
Mark scheme: B
More questions on Production possibility curve (PPC) diagrams
Q4 · The table shows four people’s demand for t-shirts at two prices
4 The table shows four people’s demand for t-shirts at two prices. price of t-shirt demand for t-shirts (units) $ Elsa George Hamid Shara 10 4 6 3 5 15 2 3 1 4 Who has the most elastic demand for t-shirts when the price rises from $10 to $15? A Elsa B George C Hamid D Shara
Mark scheme: C
Q5 · The diagram shows the demand for chocolate
5 The diagram shows the demand for chocolate. price X Y D O quantity demanded per week What could cause the movement from point X to point Y? A a change in tastes B a fall in the price of chocolate C an increase in income D a successful advertising campaign for chocolate
Mark scheme: B
Q6 · A company produces an electric car that can be driven much further than other electric…
6 A company produces an electric car that can be driven much further than other electric cars without needing recharging. The car does not emit the dangerous fumes that petrol cars do. The batteries that power the car are very expensive and the company is building a huge factory to produce batteries more cheaply. Which concepts can be applied to the above statement? A average cost and mergers B external costs and mixed economy C private costs and economies of scale D public sector and market failure
Mark scheme: C
Q7 · People often eat biscuits when they drink a cup of tea
7 People often eat biscuits when they drink a cup of tea. Between 2010 and 2015, the consumption of sweet biscuits decreased because of health warnings about high sugar consumption. Sales of tea, as a result, also fell. How would this be shown on demand and supply diagrams for biscuits and tea? biscuits tea A demand curve moves to left demand curve moves to left B demand curve moves to right demand curve moves to right C movement down along the demand curve demand curve moves to right D movement up along the demand curve demand curve moves to left
Mark scheme: A
Q8 · A student needs to borrow $60 000 to pay for a five-year university course in medicine
8 A student needs to borrow $60 000 to pay for a five-year university course in medicine. What would motivate the student to borrow to pay for the course? A Debts must be repaid within the first five years of work. B Further training in hospitals must follow graduation. C High earnings are expected in the long-run. D Many skills gained on the course are non-transferable.
Mark scheme: C
Q9 · The Congress of South African Trade Unions (COSATU) is the biggest union federation in…
9 The Congress of South African Trade Unions (COSATU) is the biggest union federation in South Africa. It represents public sector workers. In 2010, it had an increase in membership. In the same year, COSATU’s bargaining strength declined. What could explain this? A There was an increase in government spending on welfare payments. B There was an increase in the country’s unemployment rate. C There was an increase in the geographical mobility of labour. D There was an increase in union funds.
Mark scheme: B
Q10 · Which worker is most likely to risk facing a falling income towards the end of their…
10 Which worker is most likely to risk facing a falling income towards the end of their career? A a manager in an engineering firm B a manual worker in a building firm C a supervisor in a retail firm D an office worker in an advertising firm
Mark scheme: B
Q11 · What is the most likely reason why airline pilots earn more than agricultural workers?
11 What is the most likely reason why airline pilots earn more than agricultural workers? A Agricultural work is difficult. B Pilots work regular hours. C There is a surplus of agricultural workers. D There is no shortage of pilots.
Mark scheme: C
Q12 · To achieve horizontal integration, a firm producing tyres could merge with another firm…
12 To achieve horizontal integration, a firm producing tyres could merge with another firm producing A motor cars. B rubber. C tyre-producing machinery. D tyres.
Mark scheme: D
Q13 · A car manufacturer has a highly mechanised assembly line using robots and a few skilled…
13 A car manufacturer has a highly mechanised assembly line using robots and a few skilled workers. An international exam board employs many thousands of examiners to mark candidates’ examination papers. Which row describes each of these activities? car manufacturer international exam board A capital-intensive capital-intensive B capital-intensive labour-intensive C labour-intensive capital-intensive D labour-intensive labour-intensive
Mark scheme: B
Q14 · A monopoly takes over an industry from competitive firms
14 A monopoly takes over an industry from competitive firms. What is not likely to be true about a monopoly compared with a competitive firm? A A monopoly will earn a higher rate of profit. B A monopoly will gain a greater share of the market. C A monopoly will offer a wider choice to the consumer. D A monopoly will operate on a larger scale of production.
Mark scheme: C
Q15 · The table shows the total costs of a firm
15 The table shows the total costs of a firm. It can sell the units for $10 each. quantity produced (units) 7 8 9 10 total cost ($) 10 15 20 25 How many units will the firm produce to maximise profits? A 7 B 8 C 9 D 10
Mark scheme: D
Q16 · When is a tax progressive?
16 When is a tax progressive? A when some goods have a higher tax than others B when the rate of tax increases as income increases C when the tax is linked to the rate of inflation D when the tax is on incomes rather than on goods or services
Mark scheme: B
Q17 · Why can government spending be described both as a fiscal policy and a supply-side policy?
17 Why can government spending be described both as a fiscal policy and a supply-side policy? A It has a nationwide effect and can control firms’ production possibility curves. B It is announced in the budget and can increase the economy’s ability to produce. C It is determined by the central bank and can raise the cost of production of firms. D It must equal tax revenue and can regulate the amount of the money supply.
Mark scheme: B
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 stable prices may prevent a current account surplus on the balance of payments.
Mark scheme: C
Q19 · A government cuts the rate of income tax
19 A government cuts the rate of income tax. What effect is this likely to have on tax evasion and revenue from indirect taxes? revenue from tax evasion indirect taxes A decrease increase B decrease no effect C increase increase D increase no effect
Mark scheme: A
Q20 · A newspaper reported that a country’s economy had grown by 3% during the last year
20 A newspaper reported that a country’s economy had grown by 3% during the last year. What must have increased in that year? A costs of production B gross domestic product C unemployment D wage levels
Mark scheme: B
Q21 · In the poorest developing countries it is difficult to measure the size of GDP
21 In the poorest developing countries it is difficult to measure the size of GDP. What is the main cause of this? A A high proportion of the paid workforce is in the informal sector. B Employment in rural areas is seasonal in nature. C The provision of services cannot be given a value. D Women are discriminated against in many jobs.
Mark scheme: A
More questions on Differences in economic development between countries
Q22 · The information below refers to an economy for a financial year
22 The information below refers to an economy for a financial year. government expenditure = $2866 million government revenue = $1940 million What was the budget balance of the government in that year? A $926 million in deficit B $4806 million in deficit C $926 million in surplus D $4806 million in surplus
Mark scheme: A
Q23 · The table shows some information from a developing country
23 The table shows some information from a developing country. consumer prices: % change on previous year percentage change year on previous year (%) 2011 4 2012 5 2013 3 2014 2 Which statement must be correct? A Prices fell between 2013 and 2014. B The cost of living was lowest in 2014. C The purchasing power of money rose between 2012 and 2013. D Those on fixed incomes became worse off between 2011 and 2012.
Mark scheme: D
Q24 · What is likely to show that a country has a rising level of economic development?
24 What is likely to show that a country has a rising level of economic development? A a reduced inflation rate B a reduced national income per head C a reduced provision of healthcare (merit good) D a reduced unemployment rate
Mark scheme: D
Q25 · The diagram shows population projections until the year 2075 for selected areas
25 The diagram shows population projections until the year 2075 for selected areas. 12 billion 10 Africa 8 other Asia 6 India 4 China 2 Latin America developed countries 0 1950 2000 2050 2075 Assuming no migration, which situation must exist if the population is to change in the manner shown in the diagram? A birth rate falling and death rate falling B birth rate greater than death rate C death rate greater than birth rate D death rate rising and birth rate falling
Mark scheme: B
Q26 · A government in a developing country has given extra funds to promote trade in rural…
26 A government in a developing country has given extra funds to promote trade in rural areas by encouraging the establishment of small shops. What is likely to increase as a result? A primary industry in the private sector B primary industry in the public sector C secondary industry in the public sector D tertiary industry in the private sector
Mark scheme: D
Q27 · Which government policy is most likely to increase the volume of exports?
27 Which government policy is most likely to increase the volume of exports? A devaluation B embargoes C quotas D tariffs
Mark scheme: A
Q28 · Which method would both reduce imports and encourage exports?
28 Which method would both reduce imports and encourage exports? A embargoes on dangerous products B quotas on agricultural produce C subsidies on locally-produced electronics D tariffs on iron and steel products
Mark scheme: C
Q29 · The currency exchange rate of the South African rand for the Botswana pula fell by 5.7%…
29 The currency exchange rate of the South African rand for the Botswana pula fell by 5.7% between August 2014 and August 2015. What would be the immediate effect of this? A Botswana’s level of protection would fall. B Botswana’s tourists travelling to South Africa would find it less expensive. C South Africa’s imports would be cheaper. D South Africa’s tourists travelling to Botswana would receive more pula per rand.
Mark scheme: B
Q30 · In 2015, China was the world’s biggest importer of oil
30 In 2015, China was the world’s biggest importer of oil. In August 2015, China devalued its currency. What is likely to have happened? A The price of China’s exports fell and world oil prices rose as China’s demand decreased. B The price of China’s exports rose and world oil prices fell as China’s demand increased. C The price of China’s imports fell and world oil prices rose as China’s demand increased. D The price of China’s imports rose and world oil prices fell as China’s demand decreased.
Mark scheme: D
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.
4Foreign exchange rates3Workers3Demand2Firms and production2Firms’ costs, revenue and objectives2Differences in economic development between countries1Economic growth1Firms1Globalisation, free trade and protection1Inflation and deflation1Living standards1Market structure1Opportunity cost1Population1Price elasticity of demand (PED)1Production possibility curve (PPC) diagrams1The factors of production1The macroeconomic aims of government1Trade unions1What you needed in this session
Cambridge’s own grade thresholds for 2017 May/June, Paper 1 · Variant 3. A higher threshold means an easier paper — the bar moves with how the cohort did.