Cambridge Past Paper Questions
Browse 23,045questions from 25 years of O-Level & A-Level exams. Click any question to practice.
What is the main reason an economy is unlikely to rely completely on market forces to allocate resources?
What is the opportunity cost to a person of spending $20 on a new pair of sports shoes?
What is the definition of effective demand?
The price elasticity of demand for good X is −2.4, its income elasticity of demand is -0.4 and the cross elasticity of demand for good X with respe...
The diagram shows two straight line demand curves, X and Y. [Figure 8.1] What is correct about curves X and Y?
The price elasticity of the supply of yoghurt is estimated to be +1.5. If the demand for yoghurt rises and price rises by 20%, how much more will b...
Butter is a normal good. It is in joint demand with bread and in joint supply with buttermilk. The demand for butter increases because of a rise in...
The diagram shows a competitive market in equilibrium with price P and quantity Q sold. [Figure 11.1] Which area represents the producer surplus?
A policy that aims to reduce the degree of inequality of income will also reduce the level of employment in a country. What is most likely to be su...
What explains the underconsumption of merit goods?
A country uses an income tax under which the first $10000 of income is tax-free, the next $20000 is taxed at 20% and any income over $30000 is taxe...
The table shows real GDP expressed as an index number in each quarter of 2021. [Figure 15.1] What can be concluded from the table?
What is least likely to cause a simultaneous increase in demand-pull and cost-push inflation?
According to the circular flow of income, what would be the immediate result of an increase in the value of a country's exports?
To calculate the unemployment rate, the number unemployed is related to
Aggregate demand in an economy may decrease as a result of an increase in
A government has a balanced budget. It decides to increase its spending by 10%. Which increase in government revenue would produce a budget surplus?
An economy has an unemployment rate of 8%, an increase of 2% from the previous year. At the same time, the current account deficit rose from 3% of ...
The diagram shows aggregate demand (AD) curves for an economy. [Figure 22.1] Which combination is most likely to have caused the shift from AD₁ to ...
What can be considered an expansionary supply-side policy?
The table indicates the factor inputs required to produce wheat and cars in countries X and Y. [Figure 24.1] What makes it possible for both countr...
A government decides to allow the country's currency to depreciate to remove the deficit on its current account of the balance of payments. What is...
When must the terms of trade of a country change?
The table shows an extract from a country's balance of payments. [Figure 27.1] What is the current account balance?
The table shows the goods balance and services balance for a country in selected years. [Figure 28.1] Between which years did the overall goods and...
The diagram shows the market for both domestic and imported computers for an economy. The world price is p₁. [Figure 29.1] Which government policy ...
What is not a likely cause of a deficit in the current account of the balance of payments?
Which statement about a market economy is not correct?
To increase production, a firm in industry X needs to install capital equipment, while a firm in industry Y needs to research and introduce a new t...
The production possibility curve shows the maximum potential output of apples and pears for an economy using current resources. [Figure showing a ...
The price of a good rises by 5% and the quantity of it demanded rises by 3%. At the same time, the incomes of consumers of the good rise by 4%. Th...
When is division of labour likely to be most effective?
What will influence the value of the price elasticity of supply of a good?
The diagram represents the market for a good. [Figure showing a demand and supply curve with points P, S1, X, Y, D1, Z, O and quantity] Which sta...
The diagram shows the impact on equilibrium due to an increase in the costs of production. The original price is $72. The price elasticity of deman...
What is likely to have a greater effect on an individual demand curve than on a market demand curve?
The quantity demanded of a product is given by QD = 400 – 10P, when P is the price in dollars. Supply of the product is fixed at 100 units. If the...
A decrease in the quantity demanded of a product results in a proportionate decrease in sales revenues. What is true about its price elasticity of...
A government may use a range of methods to intervene in a market to affect both demand and supply. What is a method which will shift the demand cu...
To help achieve price stability, the government in country F operates a buffer stock scheme, with a minimum price of P₁ and a maximum price of P₂. ...
Why is it more difficult to quantify the wealth of an individual rather than their income?
The table shows the Gini coefficient for income in three countries. 2018 2019 2020 Costa Rica 0.479 0.478 0.497 New Zealand 0.330 0.326 0.320 Swed...
Governments may have price stability as a macroeconomic objective. What is meant by price stability?
In country S, frictional unemployment has decreased, but in country T, structural unemployment has increased. What would be possible explanations ...
The diagram shows aggregate demand (AD) and long-run aggregate supply (LRAS) with X as the initial equilibrium. [Figure showing LRAS, LRAS1, AD, A...
The money income of a country rises by 10% whereas its population falls by 10% during a year. What is likely to happen to the national income per ...
High economic growth is often accompanied by a worsening of the current account of the balance of payments. Which reason for this trend is not valid?
A government cuts income tax. Why might this be seen as an example of a supply-side policy?
Which combination of fiscal policy measures will reduce both the inflation rate and income inequality? direct taxes indirect taxes subsidies on fo...
A country's central bank decides to reduce the level of credit regulation. What is this an example of?