An oil company announced in 2015 that it was starting its drilling operations for oil deposits in the Arctic Ocean.

What will be the effect of this?

• to increase the supply of raw materials

• to reduce the level of technology available

• to solve the economic problem

• to worsen resource allocation

A self-employed fortune teller earns a living by reading the palms of people’s hands.

Which factors of production are essential to this activity?

• capital and enterprise

• enterprise and labour

• labour and land

• land and capital

A country is operating at point X on its production possibility curve (PPC). A drought significantly reduces agricultural output.

Which point represents the new position?

• A

• B

• C

• D

A government needs to decide how much to fine firms for causing the external costs of air pollution in industrial areas.

Which external cost would be the most difficult to measure in monetary terms?

• the discomfort associated with breathing

• the expenditure on additional healthcare

• the loss of earnings due to illness

• the medical research into respiratory disease

What is an example of market failure?

• city centre congestion

• low economic growth

• rising prices

• trade deficits

The table illustrates the demand and supply for coffee in a market in Africa.

When the price rises from $20 to $30 per kg, what is the price elasticity of demand for coffee?

• 0.2

• 0.5

• 2.0

• 5.0

Between 2005 and 2015 the number of late-night music clubs in the UK fell from 3144 to 1733. The causes were said to be the increase in the cost to clubs of planning regulations and the increase in alternative ways of meeting people on social media.

How would the effect of these causes be shown on a demand and supply diagram for entrance to late-night music clubs?

• A

• B

• C

• D

A job offers employees piecework, commission, paid holidays and a company pension.

Which are non-wage factors?

• commission and company pension

• company pension and paid holidays

• paid holidays and piecework

• piecework and commission

When will a trade union be most likely to succeed in achieving the aims of its members?

• when firms are trying to cut costs of production

• when the rate of unemployment in the country is high

• when trade union membership in the industry is compulsory

• when workers are unskilled

The typical pattern of income over a person’s whole lifetime is shown by which diagram?

• A

• B

• C

• D