Cambridge IGCSE Economics 0455 — 2019 Oct/Nov Paper 1 · Variant 1

Question 1

1 What is classified as one of the four economic resources? A consumption B enterprise C production D trade

Accepted Answer

B

Question 2

2 Countries X and Y have identical resources. The diagram shows their production possibility curves. food Y X O drink What can be concluded from the diagram? A X can produce food and drink more cheaply than Y. B X experiences higher unemployment than Y. C Y can produce food and drink more efficiently than X. D Y has higher retail prices than X.

Accepted Answer

C

Question 3

3 Sam wrote a list of how he would prefer to spend his Saturday afternoon. first choice go to a cricket match second choice watch the annual town parade third choice go to the cinema fourth choice visit relatives Unfortunately a thunderstorm caused the cricket match and the town parade to be cancelled. Sam went to the cinema. What was the opportunity cost of going to the cinema? A going to a cricket match B watching the annual town parade C visiting relatives D losing his Saturday free time

Accepted Answer

C

Question 4

4 Which pair of economic institutions can be found in a market economy? A local government and charities B monopolies and commercial banks C nationalised industries and partnerships D stock exchange and public corporations

Accepted Answer

B

Question 5

5 In a city, what is most unlikely to be provided by the private market system? A a museum B a school C a sports field D street lights

Accepted Answer

D

Question 6

6 The table shows the quantity demanded and supplied for a commodity at different prices. price quantity quantity ($) demanded supplied 10 100 800 9 210 700 8 400 600 7 500 500 6 600 400 What would happen to the equilibrium price if the quantity supplied increased by 200 units at each price? A It would decrease by $1. B It would decrease by $2. C It would increase by $1. D It would increase by $2.

Accepted Answer

A

Question 7

7 The table shows the quantity that producers are willing to supply at different price levels. price quantity ($) supplied 120 20 150 40 180 80 If the price increases from $120 to $180, what would be the price elasticity of supply? A 0.16 B 4 C 6 D 60

Accepted Answer

C

Question 8

8 What is an example of a non-wage factor? A bonus B commission C fringe benefits D overtime rates

Accepted Answer

C

Question 9

9 An African government has abandoned its own dollar and now uses the US dollar as its currency. Why would such a policy have been necessary? A Commercial banks restricted their lending. B Consumers only used credit cards rather than paper money. C Its own dollar no longer acted as a store of value. D The central bank controlled the issue of money too tightly.

Accepted Answer

C

Question 10

10 The table shows how three people (X, Y and Z) spend their income. person X person Y person Z food, clothing and housing 35% 50% 20% entertainment and leisure 25% 20% 40% luxury goods 40% 30% 40% For these three people, what is the most likely order of income, from highest income to lowest income? A X → Y→  Z B Y → Z → X C Z → X → Y D Z → Y → X

Accepted Answer

C

Question 11

11 A musician has a choice of playing for an orchestra in either Germany or England. Which combination of incomes and cost of living is most likely to cause her to choose the German orchestra? Incomes and cost of living in Germany compared with those in England pre-tax (gross) income after-tax (net) income cost of living A higher higher higher B higher lower lower C lower higher higher D lower higher lower

Accepted Answer

D

Question 12

12 What must result from an increase in output? A a decrease in the average cost B a decrease in the total costs C an increase in the fixed costs D an increase in the variable costs

Accepted Answer

D

Question 13

13 What is characteristic of a monopoly market structure? A A monopolist may determine the price of its product. B A monopolist’s product has many substitutes. C There are no external costs. D There is easy entry into the market.

Accepted Answer

A

Question 14

14 The table shows the sales of cold drinks made by a company in the UK in 2016 and 2017. Demand for cold drinks is influenced by changes in the temperature. In 2016 the sales followed the usual seasonal pattern. sales 2016 sales 2017 month (thousand cans) (thousand cans) April 300 290 May 400 350 June 550 270 July 570 490 August 620 590 In which month of 2017 was the usual pattern disturbed? A May B June C July D August

Accepted Answer

B

Question 15

15 A firm producing bicycles has the following costs at different levels of output. total fixed costs total variable costs output ($) ($) 10 300 800 20 300 1500 30 300 3300 What happens to the average total cost over this range of output? A It falls continuously. B It falls then rises. C It rises continuously. D It rises then falls.

Accepted Answer

B

Question 16

16 One aim of government policy is to redistribute income through taxation in order to reduce inequality. Which policy will achieve this aim? A Impose a tax of $0.20 on every dollar earned. B Increase the tax-free allowances after which tax must be paid progressively. C Introduce a tax on all food. D Provide an incentive to earn by reducing taxes for the highest paid.

Accepted Answer

B

Question 17

17 What is an example of expansionary monetary policy? A a decrease in income tax rates B a decrease in the budget deficit C a decrease in the money supply D a decrease in the rate of interest

Accepted Answer

D

Question 18

18 Which actions would be likely to increase government expenditure and reduce revenues from taxation? government expenditure tax revenues A improve health facilities for the elderly encourage people to reduce their spending B increase the amount of the state pension increase VAT (sales tax) C provide free bus transport for retired people encourage people to work beyond retirement D raise the age of retirement decrease bus fares

Accepted Answer

A

Question 19

19 The diagram shows the impact of a government imposing an indirect tax on a good. The original demand curve is D1 and original supply curve is S1. price S2 $ S1 60 50 40 D1 0 80 100 quantity What is the total tax revenue gained by the government? A $1600 B $3200 C $4800 D $5000

Accepted Answer

A

Question 20

20 The chart shows the GDP annual growth rate (percentage), 2012–2016, for Greece. 2 growth 0 rate % – 2 – 4 – 6 – 8 –10 –12 2012 2013 2014 2015 2016 year In which years did Greece experience the longest period of positive economic growth? A 2012–2013 B 2013–2014 C 2014–2015 D 2015–2016

Accepted Answer

C

Question 21

21 What are the components of the Human Development Index (HDI)? A life expectancy at birth, expected years of schooling, GDP B life expectancy at birth, expected years of schooling, GDP per head C population growth, adult literacy rate, GDP per head D population size, expected years of schooling, number of doctors per head

Accepted Answer

B

Question 22

22 Which government policy would reduce economic growth? A cutting the rate of corporation tax B increasing expenditure on education C lowering the rate of income tax D raising interest rates

Accepted Answer

D

Question 23

23 Rates of inflation and deflation are measured using a consumer prices index (CPI) over a period of time. The table shows average rates of CPI for Japan from 2010–2014. year change in CPI 2010 –0.72 2011 –0.28 2012 –0.03 2013 0.36 2014 2.75 In which period did Japan experience deflation followed by inflation? A 2010–2011 B 2011–2012 C 2012–2013 D 2013–2014

Accepted Answer

C

Question 24

24 What is a typical characteristic of a developing country? A equal distribution of income and wealth B good medical care C high gross domestic product per head D high reliance on natural resources

Accepted Answer

D

Question 25

25 In Botswana, better healthcare has meant that birth rates have been falling faster than death rates. Also the number of children born, on average, to each woman has declined from 6.4 to 3.2. What may be concluded from this information? A Government spending on education will need to increase. B Medical improvements have resulted in falling infant mortality rates. C There will be a decline in income for each person working. D There will, in the long run, be an increase in the working population.

Accepted Answer

B

Question 26

26 The table shows the percentage share of GDP held by the richest 20% and poorest 20% of the population in each country. Which country had the greatest extremes of income and poverty? country richest 20% poorest 20% A Ghana 41.7% 8.4% B Nigeria 55.7% 4.4% C Senegal 48.2% 6.4% D South Africa 64.8% 2.9%

Accepted Answer

D

Question 27

27 What would cause a favourable change in the Kenyan trade in services (invisible) account? A A Kenyan company wins a contract to transport exports from Uganda. B A Kenyan tea company increases its exports. C A Kenyan trade delegation promoting coffee sales visits India. D A Zambian company increases its exports to Kenya.

Accepted Answer

A

Question 28

28 Protectionist policies reduce the level of global economic growth. What is a possible reason for this? A Incomes earned from trading decline. B Tariffs encourage trade. C The average cost of production decreases. D The production possibility of an economy expands.

Accepted Answer

A

Question 29

29 The table shows the current account balance for four countries in 2016. It also shows each country’s exchange rate against the US dollar for 2015 and 2016. Which country had a trade surplus and a strengthened currency against the US dollar? current number of units of currency country account balance against US dollar US$ billion 2016 2015 2016 A Australia –47.9 1.39 1.38 B Belgium +4.8 0.92 0.96 C China +266.6 6.48 6.95 D Taiwan +74.7 32.90 32.00

Accepted Answer

D

Question 30

30 What would reduce the volume of international trade in the world economy? A a German bank making a loan to a Nigerian company B a Japanese car manufacturer establishing a factory in the Czech Republic C the Canadian government introducing quotas on Malaysian electronics products D the Swedish government granting aid to Somalia

Accepted Answer

C

Cambridge IGCSE Economics 0455 — 2019 Oct/Nov Paper 1 · Variant 1

Question paper12 pages

Mark scheme3 pages

Questions as text

Q1 · What is classified as one of the four economic resources?

Q2 · Countries X and Y have identical resources

Q3 · Sam wrote a list of how he would prefer to spend his Saturday afternoon

Q4 · Which pair of economic institutions can be found in a market economy?

Q5 · In a city, what is most unlikely to be provided by the private market system?

Q6 · The table shows the quantity demanded and supplied for a commodity at different prices

Q7 · The table shows the quantity that producers are willing to supply at different price…

Q8 · What is an example of a non-wage factor?

Q9 · An African government has abandoned its own dollar and now uses the US dollar as its…

Q10 · The table shows how three people (X, Y and Z) spend their income

Q11 · A musician has a choice of playing for an orchestra in either Germany or England

Q12 · What must result from an increase in output?

Q13 · What is characteristic of a monopoly market structure?

Q14 · The table shows the sales of cold drinks made by a company in the UK in 2016 and 2017

Q15 · A firm producing bicycles has the following costs at different levels of output

Q16 · One aim of government policy is to redistribute income through taxation in order to…

Q17 · What is an example of expansionary monetary policy?

Q18 · Which actions would be likely to increase government expenditure and reduce revenues from…

Q19 · The diagram shows the impact of a government imposing an indirect tax on a good

Q20 · The chart shows the GDP annual growth rate (percentage), 2012–2016, for Greece

Q21 · What are the components of the Human Development Index (HDI)?

Q22 · Which government policy would reduce economic growth?

Q23 · Rates of inflation and deflation are measured using a consumer prices index (CPI) over a…

Q24 · What is a typical characteristic of a developing country?

Q25 · In Botswana, better healthcare has meant that birth rates have been falling faster than…

Q26 · The table shows the percentage share of GDP held by the richest 20% and poorest 20% of…

Q27 · What would cause a favourable change in the Kenyan trade in services (invisible) account?

Q28 · Protectionist policies reduce the level of global economic growth

Q29 · The table shows the current account balance for four countries in 2016

Q30 · What would reduce the volume of international trade in the world economy?

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