IGCSE Economics (0455) — May–June 2025, 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 · The basic economic problem

A university rejects 2000 qualified applicants who wish to study there. Which factor of production could have caused the university to make this decision? A infinite quantity of…

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Question 2 · 1 mark · The allocation of resources - factors of production (labour mobility)

Sanjay, a coal miner, became unemployed when the only local mine closed. He lives in a village near family and friends and would like to stay in the same village. What is the…

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Question 3 · 1 mark · The basic economic problem - production possibility curve

The diagram shows the production possibility curve (PPC) for an economy that is at point X. The diagram has output of capital goods on the vertical axis and output of consumer…

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Question 4 · 1 mark · The basic economic problem - microeconomics and macroeconomics

What are both macroeconomic decisions? decision 1 decision 2 --- --- --- A a school recruits more teachers a firm sets the prices for its products B a central bank reduces money…

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Question 5 · 1 mark · The allocation of resources - market equilibrium

The table shows the quantity of coffee demanded per day and the quantity supplied per day. price ($) per kilo demand (kilos) supply (kilos) --- --- --- 12 16 26 11 18 23 10 20 20…

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Question 6 · 1 mark · The allocation of resources - demand (market demand)

The diagrams show the demand curves for the only two buyers in a market. The first diagram (buyer 1) shows a straight, downward-sloping demand curve (price on the vertical axis,…

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Question 7 · 1 mark · The allocation of resources - market changes (disequilibrium)

The diagram shows the market for ice cream and the effects of very hot weather. The diagram (price on the vertical axis, quantity on the horizontal axis) shows an upward-sloping…

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Question 8 · 1 mark · The allocation of resources - price elasticity of supply

The supply of which good is likely to be most price elastic? the good is easily stored time taken to produce the good --- --- --- A no one day B no one year C yes one day D yes…

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Question 9 · 1 mark · The allocation of resources - market failure (merit and demerit goods)

What is a characteristic of a demerit good? A it is more beneficial to the consumer than they realise B it is overconsumed in the free market C it is underproduced in the free…

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Question 10 · 1 mark · Microeconomic decision makers - wage determination and wage differences

The table shows the average wage in four countries, A, B, C and D. In which country is there the greatest relative wage discrimination against female employees? male $ female $…

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Question 11 · 1 mark · Microeconomic decision makers - firms (economies and diseconomies of scale)

The diagram shows the average total cost curve (ATC) for a firm after a merger. The diagram (costs on the vertical axis, output on the horizontal axis) shows a U-shaped average…

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Question 12 · 1 mark · Microeconomic decision makers - firms and production (productivity)

A restaurant employs two chefs who make all of the meals that are served to customers. What is most likely to increase the productivity of the chefs? A a decrease in the number of…

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Question 13 · 1 mark · Microeconomic decision makers - firms and production (costs of production)

What are fixed costs? A costs that are divided by the amount produced B costs that are present when output is zero C costs that change according to the level of output D costs…

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Question 14 · 1 mark · Microeconomic decision makers - firms and production (costs of production)

The table shows the daily output and costs of four firms making chairs. Which firm has the highest average cost of production? output (units) fixed costs ($) variable costs ($)…

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Question 15 · 1 mark · Microeconomic decision makers - firms (revenue)

The only information known about a firm is the price it charges for its product and the quantity it sells. What else can be concluded from this? A its average cost and profit B…

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Question 16 · 1 mark · Microeconomic decision makers - market structure (monopoly)

If a very competitive market becomes a monopoly, what will be likely to increase and what will be likely to decrease? increase decrease --- --- --- A barriers to entry economies…

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Question 17 · 1 mark · Government and the macroeconomy - macroeconomic aims and monetary policy

Many central banks around the world decreased interest rates during a recession caused by a pandemic. What was the most likely macroeconomic aim of this policy? A economic growth…

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Question 18 · 1 mark · Government and the macroeconomy - fiscal policy (types of taxation)

The diagram shows the percentage of income taken by a tax at different levels of income. The diagram (vertical axis '% paid in tax', horizontal axis 'income') shows a single…

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Question 19 · 1 mark · Government and the macroeconomy - fiscal policy (government budget)

What is not a likely consequence of a rise in the budget deficit in a year? A a rise in government borrowing B a rise in the level of exports C a rise in the national debt D a…

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Question 20 · 1 mark · Government and the macroeconomy - supply-side policy

When a government aims to encourage economic growth, it may adopt supply-side policies. Which policy is a supply-side policy? A increasing the money supply B lowering interest…

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Question 21 · 1 mark · Government and the macroeconomy - inflation and deflation

An economy that is fully employed is forecast to have an increase in total demand. What is most likely to increase? A the rate of absolute poverty B the government budget deficit…

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Question 22 · 1 mark · Government and the macroeconomy - employment and unemployment

A government conducted a labour force survey. It only included people of working age in the survey. The results are shown in the table. number of people --- --- of working age 10…

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Question 23 · 1 mark · Government and the macroeconomy - employment and unemployment (types of unemployment)

A school leaver is unable to find a job immediately after completing their education. Which type of unemployment is this? A cyclical B frictional C regional D structural

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Question 24 · 1 mark · Government and the macroeconomy - inflation and deflation (causes)

Which changes are likely to lead to the biggest increase in inflation in country X? demand for goods and services in country X supply of goods and services in country X --- ---…

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Question 25 · 1 mark · Economic development - living standards (GDP limitations)

In rural areas in developing countries, farmers grow food for their own consumption. Why might this mean that the GDP is a weak measure of the standard of living in those…

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Question 26 · 1 mark · Economic development - population (ageing population)

Japan's population has an increasing proportion of elderly people. What is the likely impact of this on the Japanese economy? A increased government budget deficit B increased…

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Question 27 · 1 mark · International trade and globalisation - foreign exchange rates

An Argentine product initially sells in the US for $50 when the exchange rate between the two countries is 5 pesos to 1 dollar ($). The exchange rate changes to 10 pesos to 1…

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Question 28 · 1 mark · International trade and globalisation - role of multinational companies

Mining by multinational companies (MNCs) has both costs and benefits for the host nation. Which activity is least likely to offer a benefit to the host nation? A developing…

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Question 29 · 1 mark · International trade and globalisation - foreign exchange rates

The table shows the retail price at which the same book can be bought in four countries. country price in local currency local currency --- --- --- Australia $14.99 Australian…

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Question 30 · 1 mark · International trade and globalisation - current account of the balance of payments

What is a consequence of a surplus on the current account of the balance of payments? A a decrease in GDP B a decrease in unemployment C a depreciation of the foreign exchange…

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