Oct/Nov 2008 P1

1 What is not a factor of production?

 
 
 
 

2 What is a feature of a mixed economic system but not a planned economic system?

 
 
 
 

3 The purchase of new machinery enables a firm to increase output with fewer workers.
What is the effect on labour productivity and total costs?

change in labour productivity change in total costs
A fall constant
B rise rise
C rise uncertain
D uncertain fall
 
 
 
 

4 The UK government gave subsidies to orchestras so that the number of concert performances could be increased. However, the advertisements for these concerts caused such extra demand that ticket prices rose despite the subsidy.

What can be concluded about these changes?

 
 
 
 

5 A woman playing a quiz game starts with no money, but correctly answers the question that is worth $4000. The next question is worth $10 000 but if she answers incorrectly she will leave the game with no money.

What is her opportunity cost of choosing to answer the $10 000 question if her answer is incorrect?

 
 
 
 

6 A company producing coffee in Europe has operations in Brazil and Kenya.

What is a reason why a company might decide to have operations in more than one country?

 
 
 
 

7 In which situation will a trade union be least likely to be effective in supporting the interests of its members?

 
 
 
 

8 Which disadvantage is likely to arise when a private company grows and becomes a public company?

 
 
 
 

9 The following table gives information about four companies. Which one of these companies is not a multi-national company?

 company
number of countries in which the company has shareholders
number of countries in which the company has factories
number of countries in which the company sells its products
A
2
1
100
B
1
2
50
C
10
20
20
D
20
5
5
 
 
 
 

10 In 2004, Dyson, a UK company, launched a luxury version of its vacuum cleaner in Japan. Within two years, it became the top-selling vacuum cleaner in the country.
What could have caused this increase in demand?

 
 
 
 

11 The diagram shows the market for a product. The equilibrium is at X.

Which combination of demand and supply changes would result in a new equilibrium in the area
marked Y?

Demand Change Supply Change
A decrease decrease
B decrease increase
C increase decrease
D increase increase
 
 
 
 

12 Four changes affecting the supply of a good are listed below.
Which would cause the supply curve to shift to the left?

 
 
 
 

13 Many people prefer to buy clothes from a local shop rather than travel to a specialist tailor to have them made.
Which combination of characteristics of the local shop would make this most likely?

A
easily accessible shop
high quality product
more expensive
B
easily accessible shop
average quality product
less expensive
C
shop owner known to customer
average quality product
more expensive
D
shop owner known to customer
poor quality product
less expensive
 
 
 
 

14 The price elasticity of demand for a good is calculated as –0.5.
What will occur if the price of the good increases by 10 %?

 
 
 
 

15 Each of the four sets of descriptions applies to a different person who was appointed to a job.
Each job was different.
Which job was likely to have offered the lowest pay?

A
skilled
inexperienced
older worker
B
unskilled
experienced
older worker
C
skilled
experienced
younger worker
D
unskilled
inexperienced
younger worker
 
 
 
 

16 What is most likely to explain why a worker receives above average hourly earnings?

 
 
 
 

17 In which way will an increase in income be most likely to affect the amount of spending and saving of an individual?

Spending Saving
A fall fall
B fall rise
C rise fall
D rise rise
 
 
 
 

18 Why might a person buy ordinary shares on the stock exchange rather than put the money in a savings account?

 
 
 
 

19.  25 % of both rural and urban consumers were reported to prefer products from Japan when buying electronic goods.
Which combination of characteristics are the Japanese electronic goods likely to have which persuade consumers to make this choice?

technology
length of guarantee
running costs
A
latest
12 months
high
B
standard
12 months
low
C
latest
24 months
low
D
standard
24 months
high
 
 
 
 

20 The financial director of a company adds up the expenditure on items such as electricity, petrol (gas) and diesel fuel and raw materials. The director then divides that total by the firm’s output.
What has the director calculated?

 
 
 
 

21 A business aims to maximise profits.
To do this, it will have to

 
 
 
 

22 The following report appeared in a newspaper.

British American Tobacco (BAT), the cigarette producer, said it would invest $1.5 million in China during the next two years as it set up new factories. China is estimated to be the world’s most important market for the sale of cigarettes.

What is likely to happen to the total cost, total revenue and profit of BAT?

total cost
total revenue
profit
A
decrease
increase
uncertain
B
decrease
decrease
increase
C
increase
increase
uncertain
D
increase
decrease
increase
 
 
 
 

23 Increasing returns to scale means that if all inputs are doubled, output will

 
 
 
 

24 A motor car manufacturer buys a chain of showrooms where the new cars are sold to the public.
Of what is this an example?

 
 
 
 

25 Which of the following is not included in public expenditure?

 
 
 
 

26 What is most likely to improve the economic performance of a country in the long run?

 
 
 
 

27 Rose earns $12 000 per annum and pays $4000 per annum in income tax. Johann earns $20 000 per annum and pays $5000 per annum in income tax.
What describes this system of income tax?

 
 
 
 

28 A government could be successful in achieving one of its economic aims. However, this could cause a subsequent result which might be undesirable.
Which case would the government think undesirable?

successful aim subsequent result
A improved balance of payments fewer people out of work
B faster economic growth higher living standards
C steadier prices lower trade deficit
D reduced unemployment higher rate of inflation
 
 
 
 

29 The government puts a $2.00 tax on each $8.00 DVD sold. As a result, the price of a DVD rises from $8.00 to $8.50.
What can be concluded from this?

 
 
 
 

30 Which type of unemployment is likely to lead to the most serious regional problems in a country?

 
 
 
 

31 The Gross Domestic Product (GDP) of Hong Kong rose more slowly than the rest of South East Asia between 1997 and 2002.
What is the most likely reason?

 
 
 
 

32 The table shows the index numbers for Gross Domestic Product (GDP) for four countries between 2001 and 2005.
Which country experienced the greatest economic growth over the period 2001 to 2005?

Country
2001
2002
2003
2004
2005
A
96.7
98.6
100
103.7
106.1
B
85.3
98.5
100
102.6
105.0
C
94.4
99.0
100
106.6
108.1
D
92.8
94.5
100
105.8
110.0
 
 
 
 

33 Which combination is most likely to be found in a developing country compared with a more developed country?

population growth rate death rate
A higher higher
B higher lower
C lower higher
D lower lower
 
 
 
 

34 Real Gross Domestic Product per head is often used as a measure of the change in average living standards.
What reduces its effectiveness in representing this change?

 
 
 
 

35 What will be found in a typical developed country?

 
 
 
 

36 Which commercial activity will not destroy the natural environment?

 
 
 
 

37 World-wide campaigns to reduce smoking will affect Malawi, which has relied on tobacco for its main export earnings.
What is likely to happen if Malawi is successful in replacing its earnings from tobacco by developing its tourist trade?

 
 
 
 

38 Which of the following increases specialisation?

 
 
 
 

39 A major market for bananas from Latin America is the European Union (EU). In 2006, the EU imposed a 35 % tariff on banana imports from Latin America but not on substitutes from other regions.
What impact is the tax likely to have had on the price of Latin American bananas in the EU and the revenue of Latin American producers?

EU Price of Latin American Bananas revenue of Latin American producers
A decrease decrease
B decrease increase
C increase increase
D increase decrease
 
 
 
 

40 Greenhouse gases caused by burning fuel in Europe are leading to global warming.
This results in effects on non-European countries which are called

 
 
 
 

Question 1 of 40

Categories Uncategorized

Leave a Comment