IGCSE Econs 30 MCQ (D) May 2020 (13)

A natural resource was discovered in a country. The exploitation of this resource allowed thecountry to double its gross domestic product within ten years.

Why did this not solve the basic economic problem?

• Exploiting the resource required high expenditure on capital equipment.

• Exploiting the resource caused significant environmental damage.

• Gross domestic product was unevenly distributed in the country.

• Wants still exceeded the resources available to meet those wants.

The diagram shows a shift in a country’s production possibility curve (PPC).

What would cause the shift from X to Y?

• a fall in the unemployment rate

• a fall in consumer demand

• a rise in the rate of inflation

• a rise in the size of the labour force

A farmer decides to grow potatoes instead of wheat.

What is the opportunity cost of growing the potatoes?

• the output of wheat

• the price of seed potatoes

• he profit from growing potatoes

• the time spent preparing the potato field

Which are both macroeconomic decisions?

• A

• B

• C

• D

What is the function of the price mechanism in a market economy?

• allocating resources and guiding choices

• allocating resources and guiding choices

• allocating resources and guiding choices

• preventing competitors from entering a market

The diagrams show changes in the market conditions for coffee.

Which diagram shows the effect of a poor harvest of coffee beans?

• A

• B

• C

• D

The price elasticity of supply of good X is 0.1. The good suddenly becomes very fashionable,leading to a large increase in demand.

What would be the likely outcome of this change in the short term?

• a large increase in output

• a large increase in price

• a large increase in price

• a large increase in price

What is a disadvantage to employers of switching to production using division of labour?

• What is a disadvantage to employers of switching to production using division of labour?

• flexibility of workers is lost

• repetition of tasks saves time

• training time decreases

What is an advantage to a country of having an efficient commercial banking system?

• It controls the money supply

• It controls the money supply

• It encourages tax evasion.

• It enables investment.

The graph shows women’s wages as a percentage of men’s wages in year 1 and year 2.

Which statement is shown by the graph to be true?

• Younger women earn more than older women.

• Women’s wages remain about the same between the ages of 40–50.

• In year 2, all women were earning more than men

• In year 2, women were earning a higher percentage of men’s wages than in year 1