AS Economics MJ 2019 variant 11

India is failing to reach its full economic potential because of poor rail, road and electricity infrastructure, and a lack of skilled civil engineers. Which factors of production need to be increased?

A capital and land

B enterprise and capital

C labour and capital

D land and enterprise

• A

• B

• C

• D

The fundamental economic question is how to meet unlimited wants with limited resources. What is an example of limited resources?

A insufficient consumer goods in the local shops

B insufficient jobs to allow full employment

C insufficient machinery to produce electrical goods

D insufficient tax revenue to finance building a school

• A

• B

• C

• D

Which statement is not a positive economic statement?

A An increase in the rate of income tax decreases the wish to save.

B An increase in the rate of income tax has a greater impact the greater the level of income.

C An increase in the rate of income tax causes more hours of work to be supplied.

D An increase in the rate of income tax is the fairest way to finance the national health service.

• A

• B

• C

• D

The diagram shows a production possibility curve (PPC). It indicates the combinations of consumer goods and capital goods produced by an economy using all its available resources.

What does position X indicate?

A a lower ratio of capital to consumer goods is necessary to achieve economic growth

B increasing levels of unemployment

C insufficient factors of production are available

D too many consumer goods are causing a fall in economic growth 5 The tariff on Indian goods entering the US falls from 10% to 5%.

• A

• B

• C

• D

The tariff on Indian goods entering the US falls from 10% to 5%. What will be the most likely effect on the producer and consumer surplus in the US?

• A

• B

• C

• D

The diagram shows the demand for, and supply of, carrots. What is true at price P1?

A There will be a shortage of carrots.

B There will be a surplus of carrots.

C There will be an increase in the sale of carrots.

D There will be market clearing of carrots.

• A

• B

• C

• D

The diagram shows the market for hand-made furniture. Which area of the diagram represents the producer surplus?

A area X

B area X + Y

C area Y

D area Y + Z

• A

• B

• C

• D

How is the market supply of a product in a competitive market obtained?

A by aggregating the supply of all firms producing the product

B by averaging the supply of all firms producing the product

C by calculating the supply of the typical firm producing the product

D by estimating the supply of the largest firm producing the product

• A

• B

• C

• D

The diagram shows the demand curve for luxury cars. The shift in the demand curve D1 to D2 can be explained by

A a decrease in air travel.

B an increase in advertising by luxury car manufacturers.

C an increase in income.

D an increase in the price of petrol

• A

• B

• C

• D

What is cross elasticity of demand?

A the responsiveness of price of good X due to a change in demand of good Y

B the responsiveness of quantity demanded of a good due to a change in its price

C the responsiveness of quantity demanded of good X due to a change in quantity of good Y

D the responsiveness of quantity demanded of good X due to a change in the price of good Y

• A

• B

• C

• D