Cambridge IGCSE Economics 0455 — 2018 May/June Paper 1 · Variant 1
0455/11/M/J/18 · 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 · The Norwegian government chose to spend the profits from oil on stocks, bonds and property
1 The Norwegian government chose to spend the profits from oil on stocks, bonds and property. The possibility of improving domestic infrastructure, therefore, was not taken. Which economic concept does this best illustrate? A cost of production B finite resources C opportunity cost D production possibility frontier
Mark scheme: C
Q2 · What would be classified by an economist as the factor of production known as land?
2 What would be classified by an economist as the factor of production known as land? A a discovery of oil in the South China sea B an oil rig bought by an oil company C money held by the oil companies in their bank accounts D the productivity of oil workers
Mark scheme: A
Q3 · What is the cause of the economic problem facing all countries?
3 What is the cause of the economic problem facing all countries? A climate change and global warming B significant quantities of unemployed resources C uneven distribution of income and wealth D unlimited wants in relation to limited resources
Mark scheme: D
Q4 · Which activity takes place in the tertiary sector?
4 Which activity takes place in the tertiary sector? A assembling computers B giving legal advice C harvesting grain D making bread
Mark scheme: B
Q5 · In the diagram, suppliers have set the price of a product at PS
5 In the diagram, suppliers have set the price of a product at PS. Economic theory predicts that the equilibrium price of the product will rise to PE. S price PE PS D O quantity What is the reason for this movement in price? A Demand for the product will increase. B No more of the product can be supplied. C Some consumers are willing to pay higher prices. D Suppliers are facing rising costs.
Mark scheme: C
Q6 · A government approved the construction of a new railway line connecting major cities
6 A government approved the construction of a new railway line connecting major cities. It would be built by a private company but be funded partly through taxation. It would create many jobs. People living on the route worried about the harm to their environment. Which concepts are directly involved in this statement? A excess demand and public corporation B government subsidies and perfect competition C market system and income distribution D private benefit and external cost
Mark scheme: D
Q7 · The diagram shows the supply curve for a good
7 The diagram shows the supply curve for a good. S price ($) 4 2 0 10 20 30 quantity (units) What is the price elasticity of supply when the price rises from $2 to $4? A 0.2 B 0.5 C 1 D 2
Mark scheme: B
Q8 · What is a function of a central bank?
8 What is a function of a central bank? A accepting deposits from the public B determining tax rates C implementing monetary policy D lending to businesses
Mark scheme: C
Q9 · What is likely to lead to an increase in the wages of university lecturers?
9 What is likely to lead to an increase in the wages of university lecturers? A an increase in the fringe benefits provided to university lecturers B an increase in the tuition fees paid by university students C government policies reducing the length of the training for university lecturers D increased demand from students to study at university
Mark scheme: D
Q10 · When is a trade union likely to have more power to increase its members’ wages?
10 When is a trade union likely to have more power to increase its members’ wages? A when imports are increasing B when labour supply is increasing C when output is increasing D when unemployment is increasing
Mark scheme: C
Q11 · The table shows the percentage (%) of income saved by different age groups
11 The table shows the percentage (%) of income saved by different age groups. age (years) 15–29 30–39 40–49 50–64 65+ % of income saved –30 –5 +15 +30 –10 What can be concluded from the table? A Over the age range shown total savings equalled total dissavings. B The 15–29 age group has the lowest level of income. C The 50–64 age group saves the highest percentage of its income. D The 65+ age group has a lower income than the 30–39 age group.
Mark scheme: C
Q12 · Which characteristic can exist both in monopoly and in perfect competition?
12 Which characteristic can exist both in monopoly and in perfect competition? A freedom of entry B many buyers C many sellers D perfectly elastic demand curve
Mark scheme: B
Q13 · An industry is experiencing diseconomies of scale
13 An industry is experiencing diseconomies of scale. What will be happening to long run average cost and total cost? long run total cost average cost A decreasing decreasing B decreasing increasing C increasing decreasing D increasing increasing
Mark scheme: D
Q14 · A firm that sells its product for $6 a unit has the following total costs
14 A firm that sells its product for $6 a unit has the following total costs. output (units) 0 10 20 30 total costs ($) 40 100 120 150 Which statement is correct? A Average cost is lowest when 10 units are produced. B The firm does not make any profit when 20 units are sold. C The firm has no fixed costs. D Total variable costs fall continuously over these outputs.
Mark scheme: B
Q15 · Which statement about fixed costs is correct?
15 Which statement about fixed costs is correct? A They exist only in the long run. B They include raw material and direct labour costs. C They increase at the same rate as output. D They must be paid even if there is no output.
Mark scheme: D
Q16 · What would a government reduce as part of an expansionary monetary policy to increase…
16 What would a government reduce as part of an expansionary monetary policy to increase employment? A government spending B the money supply C the rate of interest D unemployment benefit
Mark scheme: C
Q17 · What is an aim of government policy?
17 What is an aim of government policy? A income tax B interest rates C stable prices D unemployment
Mark scheme: C
Q18 · The table shows the amount of tax to be paid at different weekly incomes
18 The table shows the amount of tax to be paid at different weekly incomes. weekly income ($) 100 150 200 250 weekly tax ($) 20 30 36 40 Which statement describes the system of income tax as income rises over this range? A It is progressive throughout. B It is proportional then becomes progressive. C It is proportional then becomes regressive. D It is regressive throughout.
Mark scheme: C
Q19 · Which situation involving the building industry is most likely to be investigated by a…
19 Which situation involving the building industry is most likely to be investigated by a government body set up to control restrictive practices? A a builder purchasing a plot of land for development of housing B groups of suppliers of building materials agreeing to fix prices C several builders bidding for the same contracts D several builders using different sources of supply
Mark scheme: B
Q20 · An economy is experiencing two consecutive quarters of negative economic growth
20 An economy is experiencing two consecutive quarters of negative economic growth. What is this economy experiencing? A budget deficit B inflation C recession D trade deficit
Mark scheme: C
Q21 · What is included in the calculation of a consumer prices index (CPI)?
21 What is included in the calculation of a consumer prices index (CPI)? A the price of a basket of goods and services B the price of exports and the price of imports C the value of the currency on international markets D the wages of consumers
Mark scheme: A
Q22 · There was a fall in investment spending by businesses in the third quarter of 2015
22 There was a fall in investment spending by businesses in the third quarter of 2015. What would be the likely result of this? A an increase in economic growth B an increase in exports C an increase in incomes D an increase in unemployment
Mark scheme: D
Q23 · The table shows units of output, value of output and number of people employed in an…
23 The table shows units of output, value of output and number of people employed in an industry over three years. output output value number employed (units, millions) ($ millions) (000) year 1 10 10 5 year 2 21 25 7 year 3 32 40 8 What can be concluded from the table? A Inflation has increased. B Productivity has increased. C Profit has increased. D Working population has increased.
Mark scheme: B
Q24 · What is found in a typical developed country?
24 What is found in a typical developed country? A fast rate of economic growth B high population growth C limited use of technology D significant tertiary employment
Mark scheme: D
More questions on Differences in economic development between countries
Q25 · Which characteristic will show that a country has significant absolute poverty?
25 Which characteristic will show that a country has significant absolute poverty? A A majority of the population will have less than average income. B Basic living needs are not being met. C Most people do not have mobile phones. D There is a high number of people living in rural areas.
Mark scheme: B
Q26 · The government of a developing country allows a multinational mining company to mine…
26 The government of a developing country allows a multinational mining company to mine minerals in order to improve the standard of living of the local people. Which action by the multinational company (MNC) will not lead to an improvement in the standard of living of the local people? A building roads to assist transport B exporting mineral ore C providing skills training D returning profits overseas
Mark scheme: D
More questions on Differences in economic development between countries
Q27 · A country has decided that it wants to increase free trade with its trading partners
27 A country has decided that it wants to increase free trade with its trading partners. Which measure would help it achieve this objective? A a higher quota on imported cars B a subsidy to domestic car producers C an embargo on cars produced in other countries D higher tariffs on imported goods
Mark scheme: A
Q28 · In 2012 the UK held the Olympic Games, which attracted a large number of visitors from…
28 In 2012 the UK held the Olympic Games, which attracted a large number of visitors from foreign countries. Which item of the UK’s current account balance will have benefited directly from this event? A export trade in goods B export trade in services C import trade in goods D import trade in services
Mark scheme: B
Q29 · The Mexican currency (the peso) has fallen in value against the US dollar
29 The Mexican currency (the peso) has fallen in value against the US dollar. What will be the effect of this on the Mexican economy? A a decrease in tariffs on imports B a decrease in the price of exports C a decrease in the price of imports D a decrease in the volume of exports
Mark scheme: B
Q30 · The table shows the rice yield in four countries
30 The table shows the rice yield in four countries. rice yield country (kilos per hectare) Japan 64 China 53 Bangladesh 20 Thailand 20 What may be concluded from this information? A Bangladesh and Thailand produce the same amount of rice. B Japan produces more than three times as much rice as Bangladesh. C Japan produces the largest amount of rice per hectare. D Japan produces the largest amount of rice per person employed.
Mark scheme: C
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 growth2Market failure2The factors of production2Current account of balance of payments1Firms and production1Fiscal policy1Foreign exchange rates1Globalisation, free trade and protection1Households1Inflation and deflation1Living standards1Market structure1Monetary policy1Money and banking1Opportunity cost1Poverty1Price determination1Price elasticity of supply (PES)1The macroeconomic aims of government1The nature of the economic problem1Trade unions1Workers1What you needed in this session
Cambridge’s own grade thresholds for 2018 May/June, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.