Cambridge IGCSE Economics Quiz

The Chinese government is concerned about the level of poverty and the need for more resources in low-income regions of the country. As a result, it is increasing its expenditure in those regions and reducing it in high-income regions. Which economic concept does this government policy illustrate?

• diseconomies of scale

• market forces

• opportunity cost

• specialisation

An airline needs people and equipment. These can be divided into factors of production. What is allocated to its correct factor of production?

• aircraft - capital

• airline owners - labour

• computer network - land

• pilots - enterprise

The diagram shows production possibility curves (PPC) for an economy that produces two goods, sweet potatoes and onions. Initially the economy is operating on PPC 1. Which combination of changes could shift PPC 1 to PPC 2?

• CHANGE 1: a fuller use of existing resources in onion farms

  CHANGE 2: a reduction in the price of sweet potatoes

• CHANGE 1: a reduction in the price of onions

  CHANGE 2: a larger population in the country

• CHANGE 1: an increase in the price of sweet potatoes;

  CHANGE 2: an increased consumer preference for onions

• CHANGE 1: an increase in the training of onion farmers

  CHANGE 2: a greater use of technology on onion farms

A government decides to move towards a market economy by selling state-owned enterprises. What is a possible motive for this?

• to create greater income equality

• to extend government control of the economy

• to increase efficiency of production

• to take account of external costs

The two diagrams on top show the demand curves for the only two buyers in the market.

What will be the shape of the market demand curve for the good?

• 
• 
• 
• 

The shoppers in a country become worried about a sudden and dangerous rise in air pollution and so buy more food in case they have to stay at home. As the air pollution spreads, supermarket staff fall ill and the supermarkets struggle to keep their shelves full of food. X was the initial equilibrium in the market for food in supermarkets. What will be the new equilibrium as a result of the above situation?

• A

• B

• C

• D

Which factor can influence the price elasticity of supply of a product?

• the degree of necessity of the product

• the level of spare capacity in the industry

• the price of substitutes

• the proportion of income spent on the product

What is a possible consequence of market failure?

• Consumers have complete information about goods.

• Disequilibrium continues in the market.

• Merit goods are under-supplied.

• Some goods are no longer demanded.

Which organisations can directly fund the growth of firms?

• A

• B

• C

• D

Which advantage do coins have that makes them more suitable than paper banknotes to act as money?

• They are more divisible.

• They are more durable.

• They are more portable.

• They are more recognisable.