Cambridge IGCSE Economics 0455 — 2023 Oct/Nov Paper 1 · Variant 1
0455/11/O/N/23 · 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 · Economists describe resources as being ‘scarce’
1 Economists describe resources as being ‘scarce’. What must be a consequence of scarce resources? A production will cause external costs B relative poverty will gradually increase C sustainable development will take place D wants will exceed productive capacity
Mark scheme: D
Q2 · The diagram shows the production possibility curve (PPC) for an economy producing…
2 The diagram shows the production possibility curve (PPC) for an economy producing consumer goods and capital goods. N consumer goods M L O G H J capital goods The economy is currently producing OM consumer goods and OG capital goods. It decides to increase production of capital goods to OH. What is the opportunity cost of this decision in terms of consumer goods? A JG B ML C MN D NL
Mark scheme: B
Q3 · A hospital has spent all of its budget allocated for employing doctors
3 A hospital has spent all of its budget allocated for employing doctors. What is the opportunity cost to the hospital of employing an extra doctor? A a reduction in the number of nurses employed B an improvement in the recovery rate of patients C an increase in the number of patients treated D the salary paid to the extra doctor
Mark scheme: A
Q4 · There has been an increase in the demand for wheat
4 There has been an increase in the demand for wheat. This has led to an increase in the demand for labour to harvest the wheat. Which branch of economics covers these two concepts? increase in the increase in the demand for labour demand for wheat to harvest wheat A macroeconomics macroeconomics B macroeconomics microeconomics C microeconomics macroeconomics D microeconomics microeconomics
Mark scheme: D
Q5 · In the United Kingdom (UK), the price of timber used in house building increased
5 In the United Kingdom (UK), the price of timber used in house building increased. This was because of a boom in the UK house building industry and a shortage of drivers to deliver the timber. What happened in the UK market for timber to cause this price increase? demand curve supply curve A shifted left shifted left B shifted left shifted right C shifted right shifted left D shifted right shifted right
Mark scheme: C
Q6 · What does a supply curve show?
6 What does a supply curve show? A A firm will supply more when consumers’ purchasing power increases. B The higher the price, the fewer goods are supplied as costs of production increase. C The lower the price, the more profit is made by the firm. D There is a positive relationship between quantity supplied and price.
Mark scheme: D
Q7 · A global pandemic causes the demand for air travel to decrease
7 A global pandemic causes the demand for air travel to decrease. Which value for the price elasticity of supply of air travel will cause the number of tickets for air travel to fall the most? A 0 B 0.5 C 1 D 1.5
Mark scheme: D
Q8 · What is a disadvantage of a market economy?
8 What is a disadvantage of a market economy? A not enough competition B not enough merit goods C no consumer choice D state intervention
Mark scheme: B
Q9 · Droughts in some countries caused the supply of wheat to fall
9 Droughts in some countries caused the supply of wheat to fall. Wheat prices then rose providing an opportunity for wheat producers in other countries to increase supply. Why might the price of wheat continue to be high in the year following the drought? A Different weather conditions allowed a bumper harvest. B Suppliers unaffected by drought failed to increase output. C The government introduced a subsidy to wheat producers. D The wheat market returned to its original equilibrium.
Mark scheme: B
Q10 · Newly built houses tend to be inelastic in supply
10 Newly built houses tend to be inelastic in supply. A government aim is to make the supply more elastic by relaxing building regulations. Why is the government not likely to achieve this aim immediately? A Banks will only lend to high-income earners. B Costs of building materials fluctuate according to season. C Houses take a long period of time to be built. D Population increases lead to greater housing demand.
Mark scheme: C
Q11 · A person planning for old age saves in the form of money rather than goods
11 A person planning for old age saves in the form of money rather than goods. Which function does money perform when this is done? A medium of exchange B standard of deferred payment C store of value D unit of account
Mark scheme: C
Q12 · What is not normally a function of the central bank of a country?
12 What is not normally a function of the central bank of a country? A acting as lender of last resort B issuing notes and coins C operating the government monetary policy D setting the government budget
Mark scheme: D
Q13 · What is a trade union most likely to protect?
13 What is a trade union most likely to protect? A the profit of a firm B the rights of a group of workers C the satisfaction of consumers D the social welfare of everybody
Mark scheme: B
Q14 · A person sets up a street food stall
14 A person sets up a street food stall. What is necessary for the food stall to survive in the long run? growth profitability A no no B no yes C yes no D yes yes
Mark scheme: B
Q15 · A large privately owned firm is the sole supplier of electricity to a city
15 A large privately owned firm is the sole supplier of electricity to a city. Which combination of characteristics is likely to exist for this firm? barriers to entry long-run profit pricing decision A high high price maker B high low price taker C low high price maker D low low price taker
Mark scheme: A
Q16 · When a firm produces 200 units, its total variable cost is $600 and its total fixed cost…
16 When a firm produces 200 units, its total variable cost is $600 and its total fixed cost is $2000. What is the average cost at this output? A $3 B $10 C $13 D $2600
Mark scheme: C
Q17 · The government of country Z announces a forecast budget deficit of $234 billion, as part…
17 The government of country Z announces a forecast budget deficit of $234 billion, as part of its fiscal policy. What is the effect of this forecast budget deficit likely to be? A a decrease in economic growth B a decrease in inflation C an increase in employment D an increase in unemployment
Mark scheme: C
Q18 · Low-income groups do not pay income tax but are able to use state-provided healthcare…
18 Low-income groups do not pay income tax but are able to use state-provided healthcare services. What does this illustrate? A monetary policy B privatisation C redistribution of income D regressive taxation
Mark scheme: C
Q19 · The government uses monetary policy and reduces the interest rate
19 The government uses monetary policy and reduces the interest rate. What might be a consequence of this? A a decrease in the rate of inflation B an increase in the level of investment C an increase in the level of savings D an increase in unemployment
Mark scheme: B
Q20 · What is a likely objective of supply-side policy?
20 What is a likely objective of supply-side policy? A improving productive potential B increasing direct taxation C increasing the power of trade unions D promoting the public sector
Mark scheme: A
Q21 · An increase in which economic indicator best describes economic growth?
21 An increase in which economic indicator best describes economic growth? A general price level B level of consumption C level of output D living standards
Mark scheme: C
Q22 · What is full employment considered to be?
22 What is full employment considered to be? A no cyclical unemployment B no frictional unemployment C no private sector unemployment D no seasonal unemployment
Mark scheme: A
Q23 · Which group is most likely to benefit during a period of rapid inflation?
23 Which group is most likely to benefit during a period of rapid inflation? A exporters B pensioners C people with debts D savers
Mark scheme: C
Q24 · What are the components of the Human Development Index (HDI)?
24 What are the components of the Human Development Index (HDI)? A life expectancy at birth, expected years of schooling, gross national income (GNI) B life expectancy at birth, expected years of schooling, gross national income (GNI) per head C population growth, adult literacy rate, gross national income (GNI) per head D population size, expected years of schooling, number of doctors per head
Mark scheme: B
More questions on Differences in economic development between countries
Q25 · Which situation must produce an ageing population?
25 Which situation must produce an ageing population? A a falling birth rate and a falling death rate B a rising birth rate and a rising death rate C a rising marriage rate and a falling death rate D a falling marriage rate and a rising death rate
Mark scheme: A
Q26 · The table shows the unemployment rate in three developed economies in one year
26 The table shows the unemployment rate in three developed economies in one year. unemployment rate % United States 7.6 Sweden 8.2 France 10.9 What is the main cause of high rates of unemployment in developed economies in periods of recession? A decreases in total demand B movement of labour between countries C reduced levels of technological change D regional inequalities of wealth
Mark scheme: A
Q27 · What is most likely to result from an extension of specialisation in manufacturing?
27 What is most likely to result from an extension of specialisation in manufacturing? A for the consumer some prices will be reduced B for the country there will be less dependency on international trade C for the employee the work will become more varied D for the producer there will be less efficiency
Mark scheme: A
Q28 · A country imposes a tariff on an imported product
28 A country imposes a tariff on an imported product. What is the effect of this change? the quantity of the the price of the product imported product increases is fixed A no no B no yes C yes no D yes yes
Mark scheme: C
Q29 · The world demand for oil is price-inelastic and oil is paid for in US dollars
29 The world demand for oil is price-inelastic and oil is paid for in US dollars. If the price of oil falls rapidly, how might it affect the US dollar? market for US$ exchange rate for US$ A greater demand for US$ increases B greater supply of US$ decreases C less demand for US$ decreases D less supply of US$ increases
Mark scheme: C
Q30 · Which benefit do multinational companies (MNCs) bring to their home country?
30 Which benefit do multinational companies (MNCs) bring to their home country? A flow of profits B higher wages C increased employment D more investment
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.
2Firms’ costs, revenue and objectives2Globalisation, free trade and protection2Money and banking2Opportunity cost2Price changes2Price elasticity of supply (PES)2Differences in economic development between countries1Economic growth1Fiscal policy1Foreign exchange rates1Inflation and deflation1International specialisation1Market failure1Market structure1Microeconomics and macroeconomics1Monetary policy1Population1Supply1Supply-side policy1The nature of the economic problem1The role of government1Trade unions1What you needed in this session
Cambridge’s own grade thresholds for 2023 Oct/Nov, Paper 1 · Variant 1. A higher threshold means an easier paper — the bar moves with how the cohort did.