Cambridge IGCSE Economics (9-1) 0987 — 2022 Oct/Nov Paper 1 · Variant 2
0987/12/O/N/22 · 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 Chinese government is concerned about the level of poverty and the need for more…
1 The Chinese government is concerned about the level of poverty and the need for more resources in low-income regions of the country. As a result, it is increasing its expenditure in those regions and reducing it in high-income regions. Which economic concept does this government policy illustrate? A diseconomies of scale B market forces C opportunity cost D specialisation
Mark scheme: C
Q2 · An airline needs people and equipment
2 An airline needs people and equipment. These can be divided into factors of production. What is allocated to its correct factor of production? people or equipment factor of production A aircraft capital B airline owners labour C computer network land D pilots enterprise
Mark scheme: A
Q3 · The diagram shows a production possibility curve (PPC) and a number of output…
3 The diagram shows a production possibility curve (PPC) and a number of output combinations for tea and coffee. output of tea W (tonnes) U X V Y Z O output of coffee (tonnes) Which combinations of tea and coffee could the economy currently produce? A U, V, W, X B U, V, X, Y C U, V, X, Z D V, X, Y, Z
Mark scheme: B
More questions on Production possibility curve (PPC) diagrams
Q4 · What is a disadvantage of a market economy?
4 What is a disadvantage of a market economy? A Consumer choice is ignored. B Consumers may lack information. C Government subsidies encourage efficiency. D There is no incentive to work.
Mark scheme: B
Q5 · Workers are awarded a pay rise but do not increase their productivity
5 Workers are awarded a pay rise but do not increase their productivity. Workers do not buy the product that they produce. How would this change be shown on a demand and supply diagram for the product? A The demand curve will shift to the left. B The demand curve will shift to the right. C The supply curve will shift to the left. D The supply curve will shift to the right.
Mark scheme: C
Q6 · The diagrams show changes in market conditions
6 The diagrams show changes in market conditions. Which diagram shows a shortage at price P? A B S S1 price price S2 P P D1 D2 D O Q1 Q2 O Q1 Q2 quantity quantity C D S1 S1 price price S2 S2 P P D D1 D2 O Q O Q1 Q2 quantity quantity
Mark scheme: A
Q7 · What is the definition of price elasticity of demand?
7 What is the definition of price elasticity of demand? A the responsiveness of quantity demanded of a product to a change in income of consumers B the responsiveness of quantity demanded of a product to a change in the price of a complementary product C the responsiveness of quantity demanded of a product to a change in the price of that product D the responsiveness of quantity demanded of a product to a change in the price of a substitute product
Mark scheme: C
Q8 · To reduce traffic congestion, a government decides to build a new road
8 To reduce traffic congestion, a government decides to build a new road. There is a toll charge on the new road. What is the main purpose of this government intervention? A to address the problem of market failure B to discourage people from using public transport C to ensure the supply of transport through the free market D to obtain revenue from the levy of a toll
Mark scheme: A
Q9 · Which organisations can directly fund the growth of firms?
9 Which organisations can directly fund the growth of firms? central commercial governments banks banks A no yes no B no yes yes C yes no no D yes no yes
Mark scheme: B
Q10 · Which advantage do coins have that makes them more suitable than paper banknotes to act…
10 Which advantage do coins have that makes them more suitable than paper banknotes to act as money? A They are more divisible. B They are more durable. C They are more portable. D They are more recognisable.
Mark scheme: B
Q11 · Which statement about different income groups is correct?
11 Which statement about different income groups is correct? A High-income groups do not need to borrow money. B High-income groups save less money than low-income groups. C Low-income groups find it easier to borrow than high-income groups. D Low-income groups save a smaller percentage of their income than high-income groups.
Mark scheme: D
Q12 · A musician has a choice of playing for an orchestra in either Germany or England
12 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
Mark scheme: D
Q13 · The central bank of a country decreases interest rates to help the economy out of a…
13 The central bank of a country decreases interest rates to help the economy out of a recession. How is this decrease in interest rates most likely to affect the levels of saving in and borrowing from the country’s commercial banks? saving borrowing A decreases decreases B decreases increases C increases increases D increases decreases
Mark scheme: B
Q14 · Which effect of increased specialisation by firms and workers is most likely to cause…
14 Which effect of increased specialisation by firms and workers is most likely to cause problems for an economy? A better product quality B greater interdependence C higher productivity D improved resource allocation
Mark scheme: B
Q15 · Which statement is correct when comparing small firms with large firms?
15 Which statement is correct when comparing small firms with large firms? A Small firms are more able to adapt to changes in market conditions. B Small firms are more able to reduce competition through barriers to entry. C Small firms benefit from lower cost per unit from economies of scale. D Small firms have higher total fixed costs and lower average fixed costs.
Mark scheme: A
Q16 · Which pair is included in a government’s budget?
16 Which pair is included in a government’s budget? A consumption and factor income B exports and imports C investments and savings D public expenditure and tax revenue
Mark scheme: D
Q17 · The table shows the rate of income tax paid at different income levels
17 The table shows the rate of income tax paid at different income levels. level of income rate of income tax $ % 30 000 20 40 000 30 50 000 40 What describes this type of tax? A indirect B progressive C proportional D regressive
Mark scheme: B
Q18 · A central bank reduces interest rates
18 A central bank reduces interest rates. What would not be a consequence of this action? A a benefit for borrowers receiving loans B a fall in the international value of the currency C a reduction in inflation D an increase in GDP
Mark scheme: C
Q19 · The diagram shows a country’s economic growth rate over a 5-year period
19 The diagram shows a country’s economic growth rate over a 5-year period. 6 economic 5 growth rate % 4 3 2 1 0 year 1 year 2 year 3 year 4 year 5 –1 –2 What can be concluded from the diagram? A Output fell throughout the period. B Output was at its highest in year 1. C Output was at its highest in year 5. D Output was at its lowest in year 4.
Mark scheme: C
Q20 · An individual decides to employ a professional decorator rather than buying the materials…
20 An individual decides to employ a professional decorator rather than buying the materials and decorating her house herself. Why would this decision cause GDP to rise? A The activity would be recorded as income for the decorator. B The individual would have more leisure time. C The professional decorator can purchase materials at a discount. D The professional decorator would work less efficiently than the individual.
Mark scheme: A
Q21 · What is the definition of the unemployment rate?
21 What is the definition of the unemployment rate? A the benefits and allowances paid by the government to people without a job B the number of people without a job but seeking a job as a percentage of the labour force C the rate of change in the number of people who have not worked over the last year D the total number of people not working when the data was calculated
Mark scheme: B
Q22 · What is most likely to cause inflation?
22 What is most likely to cause inflation? A a reduction in exports B a reduction in government spending C an increase in the rate of interest D an increase in trade union power
Mark scheme: D
Q23 · The table shows changes in economic growth and inflation
23 The table shows changes in economic growth and inflation. Which changes are likely to be the result of rising unemployment? economic inflation growth A falling falling B falling rising C rising falling D rising rising
Mark scheme: A
Q24 · The table shows the percentage changes in earnings and consumer prices for four countries…
24 The table shows the percentage changes in earnings and consumer prices for four countries in one year. Which country is likely to have experienced the greatest increase in real income during the year? country earnings consumer prices A France +6.5 +3.5 B Germany +4.0 +4.0 C Japan +4.0 –1.0 D UK +6.5 –2.0
Mark scheme: D
Q25 · What is included in the Human Development Index (HDI)?
25 What is included in the Human Development Index (HDI)? environmental life expectancy years of schooling sustainability A no no yes B no yes no C no yes yes D yes yes yes
Mark scheme: C
More questions on Differences in economic development between countries
Q26 · A fall in the level of absolute poverty can be best achieved by reducing A government…
26 A fall in the level of absolute poverty can be best achieved by reducing A government unemployment benefits. B income tax. C the number of homeless people. D the rate of inflation.
Mark scheme: C
Q27 · The table shows some details from a country’s balance of payments
27 The table shows some details from a country’s balance of payments. The country has no secondary income (current transfers). item $ million exports of goods 280 imports of goods 350 exports of services 110 imports of services 60 net primary income – 40 What is the country’s balance on its current account? A a deficit of $60 million B a deficit of $160 million C a surplus of $20 million D a surplus of $760 million
Mark scheme: A
More questions on Current account of the balance of payments
Q28 · Vietnamese companies buy insurance from companies in the US
28 Vietnamese companies buy insurance from companies in the US. How will this transaction be recorded in the Vietnamese balance of payments? section credit / debit A trade in goods credit B trade in services credit C trade in services debit D current transfers debit
Mark scheme: C
More questions on Current account of the balance of payments
Q29 · What is a restriction on the quantity of imports called?
29 What is a restriction on the quantity of imports called? A dumping B quota C subsidy D tariff
Mark scheme: B
Q30 · Which combination of factors would attract a multinational company (MNC) producing…
30 Which combination of factors would attract a multinational company (MNC) producing smartphones to operate in a low-income country? A high economic growth rate and supply of cheap labour B low corporation tax and competitive local market C limited supply of skilled workers and cheap land D strict employment laws and high import duties
Mark scheme: A
More questions on Differences in economic development between countries
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.
3Current account of the balance of payments2Differences in economic development between countries2Fiscal policy2Living standards2Monetary policy2Money and banking2Demand1Employment and unemployment1Factors of production1Firms’ costs, revenue and objectives1Globalisation and trade restrictions1Households1Inflation1Market economic system1Market failure1Opportunity cost1Poverty1Price changes1Price elasticity of demand (PED)1Production possibility curve (PPC) diagrams1Specialisation and free trade1What you needed in this session
Cambridge’s own grade thresholds for 2022 Oct/Nov, Paper 1 · Variant 2. A higher threshold means an easier paper — the bar moves with how the cohort did.