WHSS Economics: Mock Plan 2

The government of a prosperous country announced that it would offer free food to its citizens for a year. What would be the effect of this measure? A Agricultural resources would become unlimited. B Human wants would become finite. C More resources would be devoted to food production. D The basic economic problem would be solved.

• A

• B

• C

• D

What is meant by an equilibrium price? A a government price that ensures fairness for all B a price that has no pressure to rise or fall C a price that maximises the profits of the producers D a price that maximises the satisfaction of the consumers

• A

• B

• C

• D

In August 2013, a lengthy strike in north-east India, where the finest and most expensive Darjeeling tea is grown, shut down the tea industry at harvest time. What is the likely outcome of such a situation on a demand and supply diagram for Darjeeling tea? A The price will rise because demand will switch to other teas. B The price will rise because the strike will cause a movement down the supply curve. C The price will rise because the supply curve will move to the left. D The price will rise because there will be a fall in demand for the remaining Darjeeling tea.

• A

• B

• C

• D

A developer built some large houses in a rural area which poorer people could not afford. The houses destroyed an area of natural beauty. What type of market failure resulted from the development? A ignoring external cost B inequality of income C lack of information D price discrimination

• A

• B

• C

• D

A national trade union wishes to increase the wages of its members without reducing the numbers employed. Which factor would help the union to do this? A The demand for the industry’s product is high. B The industry consists of a small number of well-organised employers. C The union workers have low-level skills. D The workers’ wages are the largest cost of the industry.

• A

• B

• C

• D

What characteristics are found in a monopoly? A freedom of entry to the market and a single seller B freedom of entry to the market and many sellers C many buyers and a single seller D many buyers and many sellers

• A

• B

• C

• D

A country imposes tariffs and quotas on imported goods. What will citizens of that country experience?

• higher prices

• higher welfare

• higher unemployment

• wider consumer choice

Why might a country’s central bank raise its interest rate? A to encourage saving B to increase the money supply C to raise funds for the government D to reduce the level of employment

• A

• B

• C

• D

A government wishes to impose a tax on a good to raise revenue. It would be most likely to achieve this aim if the price elasticity of demand for the good were A high. B infinite. C low. D unitary.

• A

• B

• C

• D

An athlete needs an income and also needs time for training and competitions. Which occupation is most appropriate for the athlete? A department store manager who is paid a salary B livestock farmer working for profit C assembly-line worker who is paid a wage D self-employed photographer

• A

• B

• C

• D