Cambridge IGCSE Economics 0455 — 2025 May/June Paper 1 · Variant 1

Question 1

1 What is likely to increase the occupational mobility of labour? A increasing entry requirements to professions B increasing retraining of workers C introducing job specialisation D introducing subsidised transport

Accepted Answer

B

Question 2

2 Sonia owns a takeaway food delivery service. She decides to expand the firm, buying more vans and hiring additional drivers. Which factors of production were changed? A capital and labour B capital and land C enterprise and capital D labour and land

Accepted Answer

A

Question 3

3 The diagram shows a production possibility curve (PPC). The economy is using all of its available resources. W Z manufactured goods Y X O agricultural goods A government decides to encourage more production of manufactured goods instead of agricultural goods. Which movement shows this policy change? A W to X B W to Y C X to W D Z to X

Accepted Answer

C

Question 4

4 In 2020, to prevent the spread of a pandemic, many governments temporarily closed restaurants and cafés. What would be a macroeconomic impact of such a policy? A Demand for food to be consumed at home would rise. B Gross Domestic Product (GDP) would fall. C The profits from restaurants and cafés would fall. D Staff working in restaurants and cafés would lose income.

Accepted Answer

B

Question 5

5 Good weather results in an increase in the demand for and supply of peaches. How will this affect the price and quantity traded in the market for peaches? price of quantity of peaches peaches traded A fall fall B rise rise C rise uncertain D uncertain rise

Accepted Answer

D

Question 6

6 The diagram shows demand and supply curves for a product at its equilibrium price P. S1 S price S2 P D2 D D1 O Q quantity How would the introduction of a subsidy be shown? A Demand would shift to D1. B Demand would shift to D2. C Supply would shift to S1. D Supply would shift to S2.

Accepted Answer

D

Question 7

7 The table shows the quantity demanded at different prices. quantity price $ demanded 6 3 5 4 4 5 3 7 2 9 For which fall in price is the demand price-inelastic? A from $6 to $5 B from $5 to $4 C from $4 to $3 D from $3 to $2

Accepted Answer

D

Question 8

8 The price elasticity of supply (PES) of coffee is calculated as +0.2 for the current year and +2.0 in the long run. Why is the PES of coffee higher in the long run? A Coffee plants take several years to grow. B Consumers will not buy coffee at higher prices. C There are many substitutes for coffee. D There are no stocks of coffee.

Accepted Answer

A

Question 9

9 What would a person believe who wished to encourage the use of the market system? A people should have equal living standards B people should have freedom of action C profit maximisation is wrong D the government should correct people’s bad behaviour

Accepted Answer

B

Question 10

10 What is not a form of money? A a banknote B a cheque C a coin D a credit card

Question 11

11 If interest rates fall, what will be the most likely effect on saving and borrowing? saving borrowing A decrease decrease B decrease increase C increase decrease D increase increase

Accepted Answer

B

Question 12

12 A bus driver initially works longer hours if the wage rate increases. As his earnings increase, there reaches a point when he prefers more leisure than extra work. Which supply curve, S, represents this situation? A B C D S S wage wage wage wage rate S rate rate rate S O worker O worker O worker O worker hours hours hours hours

Accepted Answer

C

Question 13

13 What is a function of a trade union? A to negotiate workers’ contracts B to promote workers to more responsible jobs C to recruit workers for the firm D to supervise the workers in the firm

Accepted Answer

A

Question 14

14 There has been an improvement in the transport infrastructure in India that reduces the costs of farming. What is this an example of? A external diseconomies of scale B external economies of scale C internal diseconomies of scale D internal economies of scale

Accepted Answer

B

Question 15

15 A firm chooses to become more capital-intensive. What is least likely to have increased? A interest rates B minimum wages C the power of trade unions D the productivity of capital

Accepted Answer

A

Question 16

16 The diagram shows the average total costs (ATC) and average fixed costs (AFC) for a firm. ATC 14 cost $ 10 6 AFC 2 0 W X Y Z output Which statement is correct? A At output X, average variable costs are lower than average fixed costs. B At output Y, total variable costs are greater than total fixed costs. C Between outputs W and Z, total fixed costs are falling. D Between outputs W and Y, average variable costs have not changed.

Accepted Answer

A

Question 17

17 What is a macroeconomic aim of a government? A high external costs B high sales tax C low unemployment D low wages

Accepted Answer

C

Question 18

18 What is a principle of taxation? A equality between social cost and social benefit B fairness between taxpayers C profit maximisation by firms D tax revenue maximisation

Accepted Answer

B

Question 19

19 Monetary policy often involves a change in which variables? A government expenditure or taxes B interest rates or the money supply C labour market or trade union laws D tariffs or quotas

Accepted Answer

B

Question 20

20 Which supply-side policy measure is most likely to enable a government to achieve its aim of full employment? A decreasing government spending on school buildings B decreasing the number of teachers in schools C increasing taxation on private school fees D increasing the provision of enterprise skills in schools

Accepted Answer

D

Question 21

21 Which policy decision is most likely to cause economic growth? A an increase in corporation tax rates B an increase in interest rates C an increase in the amount workers can earn before paying income tax D an increase in the government's regulations for starting a new business

Accepted Answer

C

Question 22

22 A government uses the labour force survey method to calculate unemployment. What is required under this method for a person to be classified as unemployed? eligible for immediately actively unemployment available seeking work benefits for work A no no yes B no yes yes C yes yes no D yes no no

Accepted Answer

B

Question 23

23 What is most likely to rise when the level of employment falls in a high-income economy? A consumer confidence B government expenditure on state benefits C government revenue from income tax D the rate of growth of real output

Accepted Answer

B

Question 24

24 A Consumer Prices Index (CPI) consists of four items. The table shows the percentage price change for each item over a period of a year and the weight of each item. Which price change will affect the level of the CPI most? % price change item weight over 1 year A food +5 0.30 B housing +6 0.20 C recreation +3 0.40 D transport +4 0.10

Accepted Answer

A

Question 25

25 The table shows the Human Development Index (HDI) value for a country in two years. year HDI value 1 0.467 2 0.609 What would not explain the change in the HDI value? A an increase in gender equality B an increase in income per head C an increase in life expectancy D an increase in years of schooling

Accepted Answer

A

Question 26

26 Which combination of statistics is used to calculate the natural population growth of a country? 1st statistic 2nd statistic A birth rate net immigration B death rate birth rate C emigration death rate D immigration emigration

Accepted Answer

B

Question 27

27 What will increase the level of specialisation in an economy? A A computer manufacturer takes over an advertising company. B A retail store issues its own credit card. C A travel agent provides transport to the airport. D A vehicle assembler reduces its range of vehicles.

Accepted Answer

D

Question 28

28 What might an economist consider to be meant by the term dumping? A foreign firms exporting waste products B foreign firms producing goods at a lower cost than domestic firms C foreign firms selling goods that are out of fashion D foreign firms exporting products at a price below the cost of production

Accepted Answer

D

Question 29

29 In the diagram, D is the demand curve for the Chinese yuan and S is the supply curve of the Chinese yuan. price of yuan (in US dollars) S P1 P D O X Y Z quantity The Chinese central bank wishes to set the price of the yuan at P1. Which action would it have to take? A buy XY yuan B buy XZ yuan C sell XY yuan D sell XZ yuan

Accepted Answer

B

Question 30

30 The table shows the values of the items in a country’s current account in two years. year 1 year 2 item ($m) ($m) balance of goods and −30 0 services net primary income −30 −20 net secondary income ? ? balance of current −50 +10 account How did the value of net secondary income change between year 1 and year 2? A decreased by $10m B decreased by $20m C increased by $20m D increased by $30m

Accepted Answer

C

Cambridge IGCSE Economics 0455 — 2025 May/June Paper 1 · Variant 1

Question paper12 pages

Mark scheme3 pages

Questions as text

Q1 · What is likely to increase the occupational mobility of labour?

Q2 · Sonia owns a takeaway food delivery service

Q3 · The diagram shows a production possibility curve (PPC)

Q4 · In 2020, to prevent the spread of a pandemic, many governments temporarily closed…

Q5 · Good weather results in an increase in the demand for and supply of peaches

Q6 · The diagram shows demand and supply curves for a product at its equilibrium price P

Q7 · The table shows the quantity demanded at different prices

Q8 · The price elasticity of supply (PES) of coffee is calculated as +0.2 for the current year…

Q9 · What would a person believe who wished to encourage the use of the market system?

Q10 · What is not a form of money?

Q11 · If interest rates fall, what will be the most likely effect on saving and borrowing?

Q12 · A bus driver initially works longer hours if the wage rate increases

Q13 · What is a function of a trade union?

Q14 · There has been an improvement in the transport infrastructure in India that reduces the…

Q15 · A firm chooses to become more capital-intensive

Q16 · The diagram shows the average total costs (ATC) and average fixed costs (AFC) for a firm

Q17 · What is a macroeconomic aim of a government?

Q18 · What is a principle of taxation?

Q19 · Monetary policy often involves a change in which variables?

Q20 · Which supply-side policy measure is most likely to enable a government to achieve its aim…

Q21 · Which policy decision is most likely to cause economic growth?

Q22 · A government uses the labour force survey method to calculate unemployment

Q23 · What is most likely to rise when the level of employment falls in a high-income economy?

Q24 · A Consumer Prices Index (CPI) consists of four items

Q25 · The table shows the Human Development Index (HDI) value for a country in two years

Q26 · Which combination of statistics is used to calculate the natural population growth of a…

Q27 · What will increase the level of specialisation in an economy?

Q28 · What might an economist consider to be meant by the term dumping?

Q29 · In the diagram, D is the demand curve for the Chinese yuan and S is the supply curve of…

Q30 · The table shows the values of the items in a country’s current account in two years

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