Cambridge IGCSE Economics 0455 — 2024 Oct/Nov Paper 1 · Variant 2

1 Which economic question is least likely to arise as a result of scarcity? A For whom will we produce? B How will we produce? C What will we produce? D When will we produce?

Mark scheme: D

More questions on The nature of the economic problem

2 What is opportunity cost? A the allocation of resources in an economy B the cost to the individual when they consume a good C the lack of goods and services available to satisfy unlimited wants D the next best alternative forgone when making an economic decision

Mark scheme: D

More questions on Opportunity cost

3 The diagram shows a production possibility curve (PPC) for an economy that produces two goods, X and Y. Which point shows the greatest opportunity cost of producing one more unit of good X? A good Y B D C O good X

Mark scheme: C

More questions on Production possibility curve (PPC) diagrams

4 A period of bad weather leads to a failure of the rice crop. What is the effect on the market for rice? A a shortage of rice and a fall in its price B a shortage of rice and a rise in its price C a surplus of rice and a fall in its price D a surplus of rice and a rise in its price

Mark scheme: B

More questions on Price determination

5 The diagram shows a change in demand for coffee. price of coffee D1 D2 O quantity of coffee demanded per month What would cause the demand for coffee to change from D1 to D2? A a good coffee harvest B a rise in the price of substitute drinks C a rise in the wages of coffee workers D a successful advertising campaign for tea

Mark scheme: B

More questions on Demand

6 The table shows the supply for a product at different prices. price supply ($) (units) 10 120 12 160 14 200 16 240 18 280 If the price changes from $12 to $14, what will be the change in supply? A Supply will contract by 40 units and there will be a movement down along the supply curve. B Supply will contract by 200 units and there will be an inward shift of the supply curve. C Supply will extend by 40 units and there will be a movement up along the supply curve. D Supply will extend by 200 units and there will be an outward shift of the supply curve.

Mark scheme: C

More questions on Supply

7 Which changes would move the equilibrium in the diagram from point X to point Z? S Z price X D O quantity A a decrease in demand with a decrease in supply B a decrease in demand with an increase in supply C an increase in demand with a decrease in supply D an increase in demand with an increase in supply

Mark scheme: C

More questions on Price determination

8 When the price of shirts rises from $8 to $10, the demand for shirts falls from 1000 to 500. What is the value of the price elasticity of demand for shirts? A greater than 1 B unitary C less than 1 D zero

Mark scheme: A

More questions on Price elasticity of demand (PED)

9 A government intends to build a new international airport in an area of outstanding natural beauty. What would be an external cost of this decision? A the cost of importing construction materials B the enjoyment lost by those unable to use the countryside C the increase in profits for local businesses D the wages paid to the construction workers

Mark scheme: B

More questions on Market failure

10 What is an important role of a central bank? A attempts to achieve price stability B issues credit cards C provides loans to producers D provides savings accounts for consumers

Mark scheme: A

More questions on Money and banking

11 How would a change in the demand for labour affect the labour market in an occupation? change in demand change in the change in quantity for labour equilibrium wage of labour supplied A decrease decrease extend B decrease increase contract C increase decrease contract D increase increase extend

Mark scheme: D

More questions on Workers

12 A fast-food multinational bought a food-ordering website, in order to allow the multinational’s customers to download menus and make advance payments. Which term best describes this merger? A backward vertical B conglomerate C forward vertical D horizontal

Mark scheme: C

More questions on Firms

13 The diagram shows the average total cost (ATC) for a firm, in the long run. costs ATC1 ATC2 O output What would cause the shift from ATC1 to ATC2? A difficulties in controlling the firm B external economies of scale C managerial economies of scale D technical economies of scale

Mark scheme: B

More questions on Firms’ costs, revenue and objectives

14 What is most likely to encourage capital-intensive production methods in a low-income economy? A expensive capital equipment costs B grants from foreign aid programmes C supplies of local low-cost labour D a shortage of highly trained supervisors A firm’s average revenue is $20. It sells 1000 units.

Mark scheme: B

More questions on Firms and production

15 What are the firm’s total revenue and the price of the product? total revenue price ($) ($) A 20 20 B 1 000 50 C 20 000 20 D 20 000 50

Mark scheme: C

More questions on Firms’ costs, revenue and objectives

16 A competitive industry becomes a monopoly. What is the most likely advantage for consumers? A consumer choice may increase B economies of scale may reduce prices C more goods may be produced D prices may be set by market forces

Mark scheme: B

More questions on Market structure

17 What will cause real GDP to rise in a country? A nominal GDP rising at a faster rate than employment B nominal GDP rising faster than inflation C nominal GDP rising faster than the population D nominal GDP rising

Mark scheme: B

More questions on Economic growth

18 What is the money supply? A the total quantity of foreign currency available within the economy B the total quantity of money available within the economy C the total quantity of money issued by the central bank D the total quantity of money within commercial banks

Mark scheme: B

More questions on Money and banking

19 Which macroeconomic policy is most likely to achieve economic growth and price stability at the same time? A fiscal policy B import barriers C monetary policy D supply-side policy

Mark scheme: D

More questions on Fiscal policy

20 What is the definition of economic growth? A It is an increase in the general level of prices over time. B It is an increase in the level of a nation's output over time. C It is an increase in the level of total demand over time. D It is an increase in wages, interest, profits and rent over time.

Mark scheme: B

More questions on Economic growth

21 What causes cyclical unemployment in a recession? A a permanent decrease in the demand for labour B a permanent decrease in the supply of labour C a temporary decrease in the demand for labour D a temporary decrease in the supply of labour

Mark scheme: C

More questions on Employment and unemployment

22 The table shows government expenditure and revenue in selected years. government tax year expenditure revenue $bn $bn 1 500 500 2 600 400 3 700 300 What might explain the changes in the government’s budget over the period? A a fall in the dependency ratio B a fall in the exchange rate C an increase in cyclical unemployment D an increase in real GDP

Mark scheme: C

More questions on Fiscal policy

23 The table shows changes in economic policies for four countries, A, B, C and D. Which country is most likely to be following a policy of preventing deflation? government money supply taxation spending A decreasing decreasing decreasing B decreasing decreasing increasing C increasing increasing decreasing D increasing increasing increasing

Mark scheme: C

More questions on Monetary policy

24 Workers in Switzerland earn more on average than workers in Mexico. What is a likely cause of this? A A greater percentage of workers in Switzerland work part-time than in Mexico. B The average worker in Switzerland is more productive than the average worker in Mexico. C The average worker in Switzerland pays more income tax than the average worker in Mexico. D The unemployment rate is higher in Switzerland than in Mexico.

Mark scheme: B

More questions on Living standards

25 The table contains details on birth rate, death rate and net migration for several countries in a year. net birth rate death rate migration Australia 13 7 850 000 Brazil 14 6 30 000 Nigeria 39 12 –300 000 US 12 8 4 500 000 What can be concluded from the table? A Only one country, Nigeria, had a decreasing population. B The country with the lowest birth rate had the lowest death rate. C The country with the lowest death rate had the highest birth rate. D The country with the lowest natural rate of increase in population was the US.

Mark scheme: D

More questions on Population

26 Which combination best describes the characteristics of a high-income economy? Human percentage of the GDP per head Development labour force in the (US$) Index value tertiary sector A high high high B high high low C low low high D low low low

Mark scheme: A

More questions on Differences in economic development between countries

27 What might encourage international specialisation between countries? A free trade B inefficiencies in production C labour immobility D tariffs

Mark scheme: A

More questions on International specialisation

28 A government wishes to stop the dumping of a specific imported good at a very low price. Which method of protection would be most effective? A apply an embargo to this good B devalue the currency C increase interest rates D provide subsidies to home producers of this good The price of the US dollar in terms of other currencies is set by the forces of demand and supply.

Mark scheme: A

More questions on Globalisation, free trade and protection

29 To what does this statement refer? A an alternative method of trade protection B the determination of the exchange rate in a fixed exchange rate system C the determination of the exchange rate in a floating exchange rate system D the increasing globalisation of international trade

Mark scheme: C

More questions on Foreign exchange rates

30 The diagram shows the value of a country’s exports and imports of goods over five years. 30 $m 25 key 20 exports of goods 15 imports of goods 10 5 0 1 2 3 4 5 year Between which two years did the country have an increase in the value of imports and an improvement in its balance of trade in goods? A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5

Mark scheme: C

More questions on Current account of balance of payments