CIE Econs IGCSE Microeconomics 2

The following are four ways factors of production are used.

What is likely to require the greatest use of the factor enterprise?

• a carpenter making wooden articles in his leisure time for sale at a monthly market

• a corn farmer negotiating with other farmers to hire expensive machinery

• a food shop owner sometimes selling flowers in the shop

• a householder harvesting vegetables grown at home

To help reduce the price of oil, new supplies are needed. However, in 2013, objectors opposed attempts to explore new sites because of the environmental damage the exploration might cause.

How does this illustrate the basic economic problem?

• Oil is a limited resource.

• Oil is expensive.

• The exploration involves demand and supply.

• There are external costs involved in production.

With a given level of resources, an economy that can produce food or computers is at point Q on its production possibility curve. Population growth means more resources need to be allocated to food production.

At which point in the short term will the economy be in the diagram?

• A

• B

• C

• D

A person makes sandwiches at home for five hours each day. She makes 20 sandwiches per hour, and she sells each sandwich for $2 each.

What is the opportunity cost if she takes a holiday on a working day?

• $2

• $40

• 20 sandwiches

• 100 sandwiches

What can be found in a mixed economy but not in a market economy?

• a national economic development plan

• an unequal distribution of income and wealth

• the operation of the price mechanism

• the private ownership of factors of production

Newspapers recently reported there had been a decrease in the demand for beef and that its price per kilogram had increased.

From the initial equilibrium point X, which point in the diagram illustrates the new market equilibrium?

• A

• B

• C

• D

The diagram shows the market for fresh fish in the Caribbean with equilibrium point X. A new type of fishing boat increases production, which reduces costs.

Which point represents the new equilibrium?

• A

• B

• C

• D

A large supermarket applied to build on land which was in an area of natural beauty. The local government allowed the building, even though the natural beauty of the area would be lost, because many jobs would be created and much needed income would be brought to the local community.

Which economic ideas cannot be found in the above statement?

• external cost and private enterprise

• free market and the conservation of resources

• opportunity cost and improved standards of living

• public sector and external benefit

Cigarettes have been used as money in exceptional circumstances.

What is the most likely reason that they are not acceptable as money in normal circumstances?

• cigarettes lack durability

• cigarettes lack intrinsic value

• cigarettes lack portability

• cigarettes lack uniformity

The table shows a country’s trade union membership in millions between 2008 and 2011.

What can be concluded about the country’s trade union membership in the period 2008 to 2011?

• Trade unions had least members in 2010.

• Trade unions had most members in 2011.

• Trade union membership fell between 2008 and 2009

• Trade union membership rose between 2009 and 2011.