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WorksheetsOCR GCSE Economics paper 1 MCQ
Total questions: 62
Worksheet time: 31mins
Which of these is the best definition of economic growth?
An increase in an economy's employment level
An increase in an economy's population
An increase in an economy's productive capacity
A reduction in an economy's level of imports
Prices change to show where resources are needed. This process is called
efficiency
rationing
signalling
transmission of preferences
What is meant by unlimited wants?
Goods which do not have an opportunity cost
Resources which are essential for survival
The ability to buy whatever is required
The infinite desire for goods and services
Which of the following refers to the role of the consumer?
Acts as the end-user of a good or service
Acts to protect buyers of goods and services
Can decide what goods and services to supply
Can introduce regulations about goods and services
Which of the following is the best explanation of equilibrium price and quantity?
Price is the interaction of demand and supply to set the quantity
Price is unlikely to change given existing demand and supply conditions
Quantity has the same percentage change as any price change
Quantity is fixed in relation to changes in demand and supply movements
The table shows the cost of insurance for a car, depending on the age of the driver. Which of the following statements is correct?
A 20-year-old driver pays twice as much as a 50-year-old driver
A 30-year-old driver pays £500 less than a 20-year-old driver
The smallest change in insurance payment is between the ages of 30 and 40
The largest percentage change in insurance payment is between the ages of 40 and 50
As a result of its growth, a business can now afford to advertise on local radio. This is an example of which economy of scale?
Financial
Increased dimensions
Marketing
Purchasing
A village is over 10 miles away from the nearest two towns. The village shop sells bread. For someone living in the village wanting to buy bread, the shop is a
competitor
monopolist
oligopolist
specialist
Which of the diagrams shows a supply curve with a unitary elasticity of supply?
W
X
Y
Z
Which of the following is the best explanation of the difference between price and worth?
Price is determined by the interaction of demand and supply whereas worth is how consumers indicate their choices
Price is how resources are efficiently distributed whereas worth is the opportunity cost of using the resources
Price is the cost of a product whereas worth is how that price is determined by the market
Price is the sum of money needed to pay for a product whereas worth is how much someone values the product
Medium of exchange refers to anything that sets the
cost of goods and services acceptable to all parties in a transaction
payment of goods and services acceptable to all parties in a transaction
price of goods and services acceptable to all parties in a transaction
the standard of value of goods and services acceptable to all parties involved in a transaction
When is a cut in the rate of interest most likely to lead to an increase in investment?
When consumer confidence is low
When firms do not expect an increase in demand
When firms know that there is a lack of available credit
When there is an increase in exports
Enterprise requires the individual concerned to organise the
factors of production to minimise the opportunity cost
market for the factors of production
production and to bear the risks of the project
risk involved in borrowing the necessary finance
The market supply curve for goods and services normally slopes upwards. Which of the following best explains the reason for this?
Average costs of production fall as output increases
Higher prices attract new firms to the market
Opportunity costs of not producing rise as output increases
Production costs fall as output increases so profits rise
The prices of branded goods, such as Heinz baked beans, are usually higher than a supermarket's own label. This is likely to be due to
higher advertising costs
higher productivity
lower average costs
lower profit margins
Excess demand is corrected in a market by changes in
price
quantity
resource allocation
taxes
Firms need to survive in a market. Which of the following is an example of a suitable method to survive?
Encourage existing customers to return
Enter into competition with consumers
Provide an external economy of scale
Reduce total supply
Market demand is the total demand for goods and services as a result of
adding together all individual demand
adding together direct and indirect demand
changes in prices at each quantity
consumers' willingness and ability to buy
The table shows the total revenue of a firm. If output increases from 1 to 4, what is the change in the firm’s average revenue?
£28
£18
- £10
- £3
When a society does not use money to exchange goods and services it is called
a barter economy
a market economy
equilibrium
specialisation in production
A clothing manufacturer has decided to specialise in making trousers for women. Which of the following would be a direct benefit of this for the producer?
Creation of jobs for the local skilled workers
Increase of job satisfaction of the workers
Increase of productivity of the workers
Greater likelihood that workers will change jobs
Which of the following is an example of a market in operation?
A country experiences inflation
Consumers buy services from producers
The government taxes producers
Workers pay taxes out of their wages
Which of the following would shift the supply curve for a good to the right?
A fall in the firm’s costs of production
A positive change in consumer tastes
A successful advertising campaign
A tax on the good
A chemist earns £40000 a year. She has £100000 in a bank account and the bank pays interest at 3% per year. Her gross income per year is
£3000
£40 000
£43 000
£140 000
Demand is defined as
the desire to purchase a good or service over time
the relationship between the quantity of a good or service sold and consumer incomes
the relationship between the total revenue a firm receives and the price
the willingness and ability to purchase a good or service
The table shows some cost and output data for 2018 for a firm producing gloves. In 2019, variable costs increased by 15% but fixed costs and output did not change. Calculate the firm's total costs in 2019.
£6900
£18 000
£18 900
£20 700
A business which operates in the secondary sector
grows agricultural products
manufactures goods
mines for commodities such as copper ore
produces services
Which of the following is the most likely effect of an increase in advertising on the market for breakfast cereals?
The market demand curve shifts to the left
The market demand curve shifts to the right
The market supply curve shifts to the left
The market supply curve shifts to the right
Traditionally, the main function of a building society is to
help the government to fund any shortage in tax receipts
insure properties against damage
provide funds for individuals to purchase a house
provide funds for industry to invest
The table shows the share of national output for each sector of an economy in a year. Which conclusion can be made from the data?
The economy is smaller than most other economies
The secondary sector is four times larger than the primary sector
The tertiary sector is the fastest growing sector
The total value of national output is £100
Which of the following is most likely to increase the wage rate of teachers in the UK?
A fall in the number of children of school age
A shortage of qualified teachers
An increase in the number of qualified teachers coming to the UK from abroad
An increase in the number of young people training to teach
A market system allocates scarce resources through
government taxes and subsidies
prices and incentives
the allocation of state benefit payments
the control of wages
If there is an increase in demand, how will this affect the equilibrium price and quantity when a supply curve is unitary price elastic?
The equilibrium price and equilibrium quantity will both increase
The equilibrium price will increase but equilibrium quantity will not change
The equilibrium quantity will increase but equilibrium price will not change
There will be no change because the market is already in equilibrium
Which of these workers produces output in the primary sector?
A farmer
A nurse
A waiter in a restaurant
A worker on a building site
The table provides information about the market for a good. The current price is £10. Which of the following statements is correct?
Only a government price control can bring about equilibrium
The current price is above the market equilibrium price
There is excess demand of 200 units per week
There is excess supply of 200 units per week
A firm's labour productivity will have increased when
the level of output and the labour force both decrease by 50%
the level of output and the labour force both increase by 100%
the level of output increases by 100% as the labour force increases by 80%
the level of output increases by 100% as the labour force increases by 120%
Which of the following is true for all factor markets?
Demand is derived
Final goods and services are bought and sold
Households are the buyers
Prices are determined by the government
A flower seller increases her prices by 10% and finds that it has no effect on the amount that she sells. This suggests that demand for the flowers is
perfectly price elastic
perfectly price inelastic
price inelastic
unitary price elastic
The table shows the wage rate and employment level for two years in a particular industry. What would explain the change from Year 1 to Year 2?
A decrease in the demand for labour
A decrease in the supply of labour
An increase in the demand for labour
An increase in the supply of labour
Which of the following is an incorrect statement about consumers?
Goods and services are bought for personal use
They compare the satisfaction of consumption against the price when making a purchase
They decide what goods and services will be produced
They have little power in the market
Which of the following is a factor of production?
A credit card
A household's washing machine
A one pound coin
A piece of spare land
Which of these is classified as part of the output of the primary sector?
Buildings
Dishwashers
Haircuts
Oil
Supply means the amount producers are willing and able to provide to the market at a given
level of consumer income
price
quantity demanded
request by the government
What will usually lead to a shift in the demand curve to the right?
An increase in consumers’ incomes
A technological improvement which reduces the costs of production
The government introduces a tax on the product
The supply curve shifts to the right
Which of the following will occur if there is a large increase in the demand for housing?
A leftward shift in the demand curve for builders
A leftward shift in the supply curve of builders
A rightward shift in the demand curve for builders
A rightward shift in the supply curve of builders
John is paid in twelve monthly instalments. Each month he earns £2000 in gross pay minus deductions for income tax of £500. What is his annual net pay?
£1500
£2500
£18000
£24000
An oligopoly differs from a competitive market because
a competitive market has larger firms than an oligopoly
a competitive market has lower barriers to entry than an oligopoly
firms in an oligopoly do not differentiate their products
firms in an oligopoly only compete on price
Which of the following is an example of an economy of scale?
Bulk-buying of materials
Increased raw material costs
Sustainable production
Unemployment
A firm raises the price of its products from £10 to £11. Its sales fall from 100 to 90 units per day. Which of the following statements must be true?
Its profits will decrease
Its profits will increase
Its revenue will decrease
Its revenue will increase
Goods A and B are substitutes. The supply of good A increases. What will happen in the market for good B?
Demand will decrease
Demand will increase
Nothing
The supply curve will shift to the right
Which of the following is the most likely result of increased competition within a market?
High barriers to entry
High production costs
Increased profits
Lower prices
The table shows a firm's output and its average costs of production. It can sell output at £3 per unit. What is the maximum possible profit?
£0
£20
£40
£60
An upward sloping supply curve is a straight line starting at the origin. This supply curve is
price elastic
price elastic to begin with but becomes price inelastic at higher levels of output
price inelastic
unitary price elastic
The diagram shows the market for rented accommodation. Which of the following statements about the diagram is correct?
A price of r is above the market price of rented accommodation
As the price of rented accommodation increases supply will increase
If r is the current price of rented accommodation some people will not be able to rent any accommodation
The supply of rented accommodation is price elastic
The diagram shows the relationship between output and the total costs of production, TC. Which of these statements about the diagram must be true?
Average costs rise when output rises
Profits increase with an increase in output
The firm still has costs to pay even if it produces nothing
Total revenue will be increasing
Which of the following is most likely to cause an increase in the price of oil?
A decrease in the demand for oil
A decrease in the oil industry's labour costs
A fall in the price of coal
Reduced competition between oil producers
Which one of the following will lead to a shift in the supply curve to the left?
A fall in demand for the good
A fall in the price of the good
A subsidy paid to producers
A tax placed on the production of the good
Which of the following is not a scarce resource?
Air
Buildings
Labour
Machinery
All production decisions have an opportunity cost. This means that when something is produced
an identical alternative is given up
the least valuable alternative is given up
the next best alternative is given up
there is no other alternative
Which of the following lists contains only factors of production?
Capital, government, money and suppliers
Land, labour, capital and enterprise
Land, labour, capital and money
Machinery, buildings, output and profits
The price elasticity of demand for a good is unitary. What will happen if prices rise?
Expenditure on the good will fall
Expenditure on the good will rise
The quantity demanded will fall
The quantity demanded will rise
The diagram shows the demand curve for a good. Which area represents the total amount paid by consumers when the price is A?
AEB
OABC
OABD
OEBC
