AS & A Level Economics (9708) — October–November 2023, Paper 12

30 questions · every question answerable online with instant point-by-point AI marking against the official mark scheme.

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Question 1 · 1 mark · Basic economic ideas and resource allocation - production possibility curves and opportunity cost

PPC is the production possibility curve in country T. Which changes take place in country T’s opportunity costs of producing X as it increases production of X? A Opportunity costs…

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Question 2 · 1 mark · Basic economic ideas and resource allocation - factors of production (entrepreneurship)

What is considered the essential requirement for all entrepreneurs? A attracting customers B buying stock C managing staff D taking risks

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Question 3 · 1 mark · Basic economic ideas and resource allocation - types of goods (public, private, merit, demerit, free goods)

A new section of a road is provided toll-free by the government. What best describes this good? A a demerit good B a free good C a private good D a public good

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Question 4 · 1 mark · Basic economic ideas and resource allocation - economic systems (market, planned and mixed)

Eastern European nations have changed from planned to market economies. Which policy was least likely to have been adopted? A allowing prices to fluctuate B keeping established…

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Question 5 · 1 mark · The price system and the microeconomy - demand, supply and related goods (substitutes)

Rice and pasta are both basic foods in a country. How would a health scare concerning rice affect the market for pasta? A There will be a shift of demand and a contraction of…

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Question 6 · 1 mark · The price system and the microeconomy - market failure and imperfect information

Some goods are over-consumed in a market economy. What is likely to be the cause of this? A Consumer surplus exceeds producer surplus. B Consumers undervalue the benefits of…

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Question 7 · 1 mark · The price system and the microeconomy - consumer surplus

A family is willing to pay a maximum of $600, $500 and $400 for air tickets for the mother, father and daughter to attend a wedding in another city. The airline announces a…

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Question 8 · 1 mark · The price system and the microeconomy - income elasticity of demand

After a 10% decrease in a consumer’s income, the consumer’s demand for a good rises from 100 to 105. What is the value of the consumer’s income elasticity of demand for this good?…

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Question 9 · 1 mark · The price system and the microeconomy - determinants of supply and shifts of the supply curve

In 2010, poor harvests reduced fruit crops and furniture producers gave big discounts on furniture products. How might these changes have affected the position of the supply curve…

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Question 10 · 1 mark · The price system and the microeconomy - demand and supply, and market equilibrium

In the diagram, D and S represent the demand for and supply of smartphones. Many components used in the production of smartphones are imported. The initial equilibrium is at point…

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Question 11 · 1 mark · The price system and the microeconomy - short-run and long-run market equilibrium and government intervention

The diagrams show the demand for and the supply of houses. In the short run, the stock of houses for sale, S1, is fixed. A government decides to allow some agricultural land to be…

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Question 12 · 1 mark · The price system and the microeconomy - market equilibrium and disequilibrium (shortages and surpluses)

The equation for the quantity demanded, QD, for a product is QD = 400 − 20P where P = price in $. The quantity supplied, QS, is given by QS = 100 + 40P. Which change will occur if…

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Question 13 · 1 mark · The price system and the microeconomy - determinants of demand and price determination

What is the most likely cause of the continuous increase in prices of famous paintings by now dead artists? A the increasing technological ability to copy famous paintings…

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Question 14 · 1 mark · Government microeconomic intervention - direct and indirect taxes (regressive taxes)

What is most likely to be regressive? A corporate profit taxes B state pension benefits C specific tax on cigarettes D unemployment benefits

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Question 15 · 1 mark · The macroeconomy - national income and transfer payments

What is necessary for an action to be classed as a transfer payment? A It must include a cash payment. B It must involve a banking transaction. C It must originate from government…

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Question 16 · 1 mark · Government microeconomic intervention - indirect taxes and their effect on supply

The government imposes a specific indirect tax of $1 on each unit of a good sold. How does the imposition of the tax shift the demand or supply curve of the good? A The demand…

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Question 17 · 1 mark · The macroeconomy - inflation and the real value of money

Which term relates to a fall in the domestic real value of a currency? A deflation B depreciation C appreciation D inflation

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Question 18 · 1 mark · International economic issues - terms of trade

What must be the result for a country of a rise in its export prices relative to its import prices? A a deficit in its trade in goods B an improvement in its terms of trade C an…

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Question 19 · 1 mark · International economic issues - comparative advantage

Country X can produce a product at a lower opportunity cost than country Y. Which term best describes this statement? A absolute advantage B comparative advantage C specialisation…

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Question 20 · 1 mark · The macroeconomy - national income statistics (GDP and GNI)

For a given year, economy X publishes the following. $bn --- --- Gross Domestic Product (GDP) 100 factor income earned by residents of economy X working in foreign countries 10…

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Question 21 · 1 mark · The macroeconomy - inflation and nominal and real wages

Which combination is possible for an economy experiencing zero inflation? average nominal wages average real wages --- --- --- A falling falling B falling rising C rising falling…

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Question 22 · 1 mark · The macroeconomy - inflation, deflation and disinflation

The graph shows the rate of inflation in Japan from April 2020 to February 2021. Over which period did disinflation occur in Japan? A July 2020 to February 2021 B July 2020 to…

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Question 23 · 1 mark · The macroeconomy - economic growth and production possibility curves

The diagram shows three production possibility curves (PPC) for a country, labelled 3, 2 and 1. The original PPC for the country is 2. This country experiences a fall in its…

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Question 24 · 1 mark · The macroeconomy - aggregate demand and fiscal policy

A government increases the rate of income tax. What is the effect, in the short run, on the aggregate demand curve or the aggregate supply curve? A The aggregate demand curve…

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Question 25 · 1 mark · International economic issues - the current account of the balance of payments

A country’s current account deficit is larger this year than last. What is the most likely reason for this increase? A Demand for domestically produced goods has risen. B Domestic…

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Question 26 · 1 mark · The macroeconomy - aggregate supply and supply-side measures

Which supply-side measure is most likely to produce short-run growth in a country’s aggregate supply? A easing of controls on immigration of workers B expenditure on primary…

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Question 27 · 1 mark · Government intervention - taxation and the redistribution of income

Which tax may a government use to reduce inequality? A progressive income tax B proportionate income tax C proportionate indirect tax D specific indirect tax

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Question 28 · 1 mark · International economic issues - the balance of payments (trade in services)

A foreign government pays a UK university to educate its students. How would this be recorded on the balance of payments current account of the UK? current account component money…

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Question 29 · 1 mark · The macroeconomy - aggregate demand and aggregate supply analysis (fiscal policy)

A government wants to reduce inflation. It has decided to cut government spending by $1bn. The diagram shows different starting positions for the country’s aggregate demand (AD)…

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Question 30 · 1 mark · The macroeconomy - aggregate supply and supply-side policy

A government reduces the rate of tax firms are charged on their land and buildings. How is this likely to affect the economy’s price level and real output? price level real output…

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