Cambridge Past Paper Questions

A government decides to use supply-side policy to increase long-run aggregate supply (LRAS). What is the most likely reason why this policy tool w...

What defines a progressive tax?

Country X trades with country Y. What are the terms of trade for country X?

When is a country's exchange rate most likely to fall?

A country experiences a rising trade deficit and a current account surplus at the same time. Which combination of events might explain this? Even...

The diagram shows the production possibilities for barley and wheat in countries Q and R. [Figure showing two PPCs for country Q and country R, wi...

The diagram shows the impact of a government introducing an export subsidy for its domestic producers of oil. [Figure showing domestic supply, dom...

The diagrams show the change in a country's production possibility curve between Year 1 and Year 2. What can be deduced from the diagrams?

Which statement about trade unions is normative?

A worker can make 10 hats or 5 pairs of shoes in a day. In the market three hats can be sold at the same price as two pairs of shoes. The worker sh...

The table shows the market supply for a raw material and the individual demand firms, X, Y and Z, which are its only buyers. What is the equilibriu...

In 2008 the demand curve for new cars in the European Union shifted to the left. Which change could have caused such a shift?

Worldwide, the film industry has increased its expenditure to over $1 billion each year on successful anti-piracy measures which it finances by cha...

The demand for a commodity has unitary price elasticity. Which diagram shows the relationship between total expenditure on the commodity and its pr...

The table gives information about the market for two models of car. If the prices of the cars remain unchanged, but the price of petrol increases b...

In 2008 a disease killed a significant number of sheep used to produce wool. How would the short-run effect be shown on a demand and supply diagram...

The government imposes a maximum price of P2 on a product. [Figure shows a standard demand and supply diagram with price P1 and quantity Q1 at equi...

The diagram shows a demand curve for journeys on a toll road. If there is a reduction in the toll from $5 to $3, what is the resulting increase in ...

What does not happen when price acts as a means to allocate resources?

James grows fruit trees in his garden. They attract butterflies and bees. What is not an externality of this?

The table shows some of the costs when a firm produces a good. What is the additional cost to a firm of producing the 24th unit?

What makes it particularly difficult to take decisions using cost-benefit analysis?

Which good is excludable but non-rival?

The diagram shows the demand and supply curves of a good. The government sets a maximum price of OJ for the good. How will this affect the consumer...

The diagram shows production possibility curves for two countries, X and Y. What can be deduced from the diagram?

The statements that follow relate to possible gains from an increase in free trade. Which gain is least certain to result?

A group of countries decides to change from being a customs union to being an economic union. What additional feature will this give the group?

The table shows the balance in $ million for four items in a country's current account for two years. What can be concluded about the changes betwe...

The diagram shows changes in the numbers employed in four different industries between 2002 and 2007. What can be concluded from the diagram?

The average consumer divides his expenditure between food, accommodation and clothing in the ratio 5:3:2. During the course of a year, the price of...

Which statement about inflation is correct?

The table shows a country's rate of inflation for four years. What fell between 2005 and 2008?

When is a deficit on the current account of the balance of payments likely to worsen?

What would identify a country with a balance of payments disequilibrium?

The table shows the number of Jamaican dollars which exchanged for one unit of selected currencies in June and July 2001. What might be concluded f...

Following a long period of depreciation of the US$, both the US and UK monetary authorities raised their domestic interest rate. What will happen t...

In a command economy, what is the basis for determining the allocation of factors of production?

What distinguishes capital from other factors of production?

What is likely to be greater in a planned economy than a market economy?

Which is a normative statement?

What is consistent with an individual demand curve that slopes down from left to right?

What will cause the demand curve for domestically produced cars to shift to the left?

The diagrams show changes in the market for a good. Which diagrams represent ‘a change in the quantity demanded'?

The diagram shows the demand curve for a product with unitary price elasticity. What will happen with such a curve?

In the diagram D and S are the demand and supply curves of a good. What could cause the supply curve to shift in the short run to S₁?

A refinery which processes oil into petrol (gas) is faced with the following conditions. 1 It is working at full capacity. 2 Its petrol storage tan...

The table gives estimates of the price elasticities and cross elasticities of demand for travel. What would be the change in the volume of rail tra...

The diagram shows the demand and supply curves for a good. The government fixed a maximum price of OP₁. What would this have achieved?

Global stocks of cod are currently under threat due to over-fishing whilst there are ample supplies of the less popular Alaskan pollock. How might ...

The table shows some of the costs and benefits at a given level of production of a good. What is correct at this level of production?