3. IGCSE ECONS MCQ past papers

A business person employs two people to make sandwiches to sell in a cafe.

As well as labour, which factors of production are involved in this activity?

• capital, enterprise and land

• capital and land only

• capital and enterprise only

• enterprise and land only

Why is choice an important part of the basic economic problem?

• Choice is necessary to achieve an equilibrium price

• Limited resources have many uses

• Manufacturers produce a large variety of foods.

• The market leads to an unequal distribution of goods.

A power plant is built to provide electricity to a rural area in Botswana.

What is the opportunity cost to the local economy of building the plant?

• the cost of the building materials

• the price of electricity

• the school which was not built as a result

• the wages of the power plant workers

In a mixed economy, output is produced by

• A private enterprise and individuals.

• the market alone.

• the state alone.

• the state and private enterprise

A developer built some large houses in a rural area which poorer people could not afford. The houses destroyed an area of natural beauty.

What type of market failure resulted from the development?

• ignoring external cost

• inequality of income

• lack of information

• price discrimination

When will a trade union be less likely to be able to achieve a rise in wages for its members?

• during a recession

• in an economic boom

• when productivity is rising

• where there is a limited supply of labour

A company decided to reduce the price of its product by 10%.

What would happen?

• The firm’s costs would decrease if the elasticity of demand was greater than one.

• The firm’s profits would increase if the elasticity of demand was greater than one.

• The firm’s revenue would increase if the elasticity of demand was greater than one.

• The quantity sold would decrease if the elasticity of demand was less than one

The world’s open-cast mining of mineral ores is dominated by a few multinational companies which employ relatively few workers.

What does this indicate?

• Production is capital-intensive.

• Productivity of labour is low.

• The market is perfectly competitive.

• There is a monopoly of world production.

Which statement about the meaning of government economic aims is correct?

• Economic growth means that a country’s real output must rise over time.

• Full employment means that no one must be unemployed.

• Price stability means that the price of all goods and services must remain unchanged.

• Redistribution of income means that everyone must have equal incomes.

A government decided to increase its spending on building schools and hospitals.

Which aim of government policy is most likely to be achieved by this increase?

• a balance of payments surplus

• a stronger exchange rate

• economic growth

• price stability