All countries need to produce food.

Which type of agriculture would make the best use of the resources of developing and developed economies?

• A

• B

• C

• D

A farmer reduces the land used to grow wheat from 80 hectares to 60 hectares and increases the use of the land for growing potatoes from 80 to 100 hectares.

What is the opportunity cost of this change?

• The output from 20 hectares used for growing potatoes.

• The output from 20 hectares used for growing wheat.

• The output from 60 hectares used for growing wheat.

• The output from 80 hectares used for growing potatoes.

The diagram shows the change in an economy’s production possibility curve (PPC) from year 1 to year 2.

What might explain the change from year 1 to year 2?

• Resources have moved from the production of services to the production of goods.

• The number of workers unemployed in manufacturing has fallen.

• The producers of services have introduced better technology.

• The workers in the production of goods have become less efficient.

What can be found in a market economy?

• externalities and monopolies

• interest rates and public goods

• public corporations and market prices

• tax rates and commercial banks

A private sector firm is given a contract by the government to supply a country’s water.

Which government directive will minimise the risk of market failure?

• allow the firm to ration water rather than meet demand

• ensure the firm’s supply includes all areas which are expensive to service

• insist that the firm aims to maximise profits

• instruct the firm to provide water only to those who can pay for it

What is meant by the equilibrium price in the market for a good?

• the average price paid by consumers

• the price at which maximum profit is made

• the price at which the producer breaks even

• the price at which the supply and demand curves intersect

The table shows the effect of a change in the market price from $5 to $6 on the supply of mobile (cell) phones.

Which statement about the price elasticity of supply of mobile phones is correct?

• Price elasticity of supply is 0.4.

• Price elasticity of supply is 2.5.

• Supply is perfectly elastic.

• There is unit elasticity

What could discourage women from seeking employment?

• More education and training are provided.

• More flexible and part-time jobs are available.

• There are fewer promotion opportunities for women.

• There is a shift in employment to the services sector.

What would be least likely to act as a store of value during a period of rapid inflation?

• cash

• gold

• property

• shares

The table shows how three people (X, Y and Z) spend their income.

For these three people, what is the most likely order of income, from lowest income to highest income?

• Y → X → Z

• Y → Z → X

• Z → X → Y

• Z → Y → X