IGCSE Economics (0455) — October–November 2023, Paper 12

Which statement is correct? A Economic goods are not scarce. B Economic goods have no opportunity cost. C Free goods are scarce. D Free goods have no opportunity cost.

The economy of country X is always on its production possibility curve (PPC). When will the goods and services produced by country X become more scarce? PPC population size ---…

What is capital? A the ability to organise the factors of production B the energy used in production C the factory used in production D the money invested in a firm

What are features of a market economy? private ownership of factors of production public ownership of factors of production government allocation of production --- --- --- --- A…

Public transport and cars are substitute goods. The price of public transport rises. What will happen to the demand for cars? A It will contract. B It will extend. C It will…

The markets of four products are all in equilibrium. The table gives the value of the price elasticity of supply (PES) for each product. The demand for each product shifts to the…

What is the value of the price elasticity of demand (PED) for a product if total revenue remains the same when the price is reduced? A zero B between 0 and 1 C greater than 1 D 1

The owner of a hotel in Malaysia finds that the price elasticity of demand (PED) for accommodation in the area is –1.7. If the hotel owner decreases the price of a room by 5%, how…

Good weather results in an increase in the demand for tomatoes. It also increases the supply of tomatoes. What must be a result of this? A The price of tomatoes will fall. B The…

What causes a change in the price of a product in a free market economy? A changes in demand and supply conditions B changes in external costs and external benefits C changes in…

The ways of making and receiving payments continue to develop. Payments can now be made using smartphones, as well as cash, debit cards and credit cards. Which method of paying…

In most countries, which organisation controls the banking system? A central bank B commercial bank C investment bank D World Bank

What is not a reason for differences in the earnings of airline pilots in a particular country? A bargaining power of employees B discrimination C government policies D inflation

An airline takes over an online clothing company. What is an advantage of such a move by the airline? A to diversify their operations B to generate economies of scale C to improve…

In which type of industry is a firm most likely to make a large profit in the short run and in the long run? number of firms in the industry barriers to entry into the industry…

A firm produces five units of output at an average cost of $20 per unit. The cost of the sixth unit is $26. What is the average cost of six units? A $4.33 B $6 C $8.33 D $21

What is an example of government macroeconomic policy? A increasing the money supply B preventing price rises in the food industry C removing a monopoly's barriers to entry D…

Why would devaluing the international value of an economy's currency help reduce unemployment? A Devaluing the currency would increase the cost of production. B Devaluing the…

What is likely to happen when the rate of interest increases? A consumer spending increases B firms buy fewer machines C people hold more cash D savers earn lower rewards

What is not a supply-side policy measure? A control of trade union power B higher indirect taxation C privatisation D skills training for workers

The table shows the real GDP per head for a country in 2021 and 2022. 2021 2022 --- --- $20 000 $21 000 What is most likely to have changed between 2021 and 2022? A Incomes were…

Which change to fiscal policy is most likely to reduce cyclical unemployment in an economy? A increasing direct taxation B increasing the budget deficit C increasing the budget…

What must have happened in a country when it experienced an annual rate of inflation of 100%? A The money supply doubled. B The price level halved. C The purchasing power of money…

The Human Development Index (HDI) can be used to measure human development in countries. Which measure would not be part of its calculation? A inequality of incomes B life…

What is the most likely consequence of an ageing population for a high-income economy? A There will be a fall in the dependency ratio. B There will be a fall in the level of…

In some developing countries a large percentage of the population is involved in subsistence farming. What can be concluded from this? A Each family will be able to produce enough…

A small country whose only export is oil decides to reduce substantially the rate at which it extracts its limited oil reserves. What is the most likely reason for this decision?…

Country X believes that country Y is selling steel at prices below the average cost of production. So, country X imposes a higher tariff on steel imports from country Y. What does…

Which factor would cause a country's exchange rate to fall? A Demand for imports increases. B Domestic interest rates rise. C Domestic savings increase. D More tourists visit the…

Many European firms employ workers from the Philippines. These workers send part of their income to relatives in the Philippines. In which part of the balance of payments current…