Cambridge Past Paper Questions
Browse 23,045questions from 25 years of O-Level & A-Level exams. Click any question to practice.
What is implied by an observation that an industry is contestable? A Barriers to entry make little difference to a firm's monopoly power. B Firms i...
What is likely to facilitate the growth of large firms in an economy? A an industry structure which approximates to perfect competition B dividend ...
A firm changes its objective from maximising profit to producing at the allocatively efficient output. In which market structure must the firm oper...
Which government policy is intended to correct 'market failure'? A guaranteed minimum prices for farmers producing certain agricultural products B ...
The chart shows changes in employment by sector for a country between 2010 and 2016. [Figure 14.1] Which statement about the period 2010 to 2016 mu...
An engineer is paid $100000 a year. The next best paid job she could get is as a teacher at $60000 a year. What are her transfer earnings and her e...
What will necessarily cause the supply curve of labour in a particular industry to shift to the right? A a fall in wages paid in similar occupation...
A café owner near a beach employed five staff and paid them each $10 an hour. During the holiday season two extra staff were needed. To get extra s...
The diagram shows an economy's production possibility curve. [Figure 18.1] What causes a movement from point X to point Y? A a positive output gap ...
In an economy real national output increases more rapidly than the increase in employment. What could account for this? A a decrease in the general...
The table shows what has happened to three economic indicators between two years in a country. population inflation rate income distribution A con...
What is assumed in the explanation of cyclical unemployment? A Employers employ more labour if aggregate demand decreases. B Exchange rates ensure ...
What identifies net injections into a country's circular flow of income? I > S X < M G < T A ✓ X ✓ key B ✓ X X ✓ = yes C X ✓ ✓ x = no D X ✓ X
According to JM Keynes, sometimes monetary policy is ineffective. The supply of money (MS) is assumed to be controlled by the central bank. The dem...
The US economy, which relies heavily on international trade to obtain raw materials and to sell products, is in equilibrium at point X. If the valu...
From any additional national income, 20% is spent on imports, 25% is paid in taxes, 5% is saved and the rest is spent on domestically produced good...
In a Keynesian model, why would a $100 million increase in government expenditure on goods and services have a greater impact on aggregate demand t...
Equilibrium income in the economy is the level of national income at which A the economy is producing at full employment national income. B the inf...
What is not an automatic stabiliser? A income tax B profits tax C state retirement pension D unemployment benefit
Which policy is most likely to allow a developed economy to meet all its macroeconomic objectives? A lowering interest rates to raise actual growth...
A government is increasing the role of market forces in its economy. However, it imposed temporary maximum price controls. Why might a government, ...
How is social cost calculated? A external cost minus external benefit B external cost minus private cost C external cost plus private cost D social...
Which government policy is not aimed at correcting inefficiency in resource allocation? A marginal cost pricing in state owned industries B permits...
The table shows some of the costs and benefits, in $ millions, associated with a road building project. Both a government department and a profit-m...
In the diagram, Q₁ is the quantity produced of a good as the result of market forces. [Figure 4.1] Which concept is present at output Q₁? A a gover...
What would not affect the budget line of an individual consumer? A the individual's preference for various goods B the level of income tax C the mo...
The diagram shows the demand curve for a product. [Figure 6.1] What is maximised at X? A marginal revenue B total revenue C marginal utility D tota...
The diagram shows a firm's cost and revenue curves. [Figure 7.1] Which features are associated with the diagram? A economies of scale and allocativ...
In the year ending July 2016, airline fuel prices fell by 20.4% while the price of passenger aircraft increased by around 1.1%. Assuming no other c...
Which feature of production would make it more likely that an industry is a contestable market? A advertising has established consumer loyalty B al...
What is an example of backward vertical integration? A a bakery buying a wheat farm B a car manufacturer buying a car showroom C a vineyard buying ...
The diagram shows a firm in imperfect competition. It changed its aim from profit maximising to sales revenue maximising. [Figure 11.1] Which type ...
An airline sells seats at $100 each three months before a flight, at $150 each one month before the flight and at $200 each the day before the flig...
What would not be an indication of a divergence between the interests of the managers and the shareholders of a company? A an emphasis on sales max...
The total cost to a school of employing ten cleaners is $60 per hour. The school estimates that the hourly marginal cost of employing an eleventh c...
What would cause a rise in the productivity of labour? A an increase in indirect taxes B an increase in the quality of capital C a rise in consumer...
In the diagram D₁ and S are the initial demand and supply curves for building workers. [Figure 16.1] If the demand for building workers increases t...
Under which circumstances will a subsidy from the government be most beneficial if there are externalities from producing good X? externality caus...
Which tax would help a government achieve a more equal distribution of income after tax? A a constant rate sales tax applicable to all goods and se...
A country has a population of 100 million. There are 5 million people unemployed and the country has an unemployment rate of 10%. What is the size ...
Which type of unemployment is correctly linked to the description of its cause? type of unemployment | description of the cause ------------------...
Growth rates can be calculated using changes in the value of GDP from year to year. Why is real GDP per head considered to be a better indicator th...
What would not exist in a free market, open economy? A autonomous investment B household saving C import spending D indirect taxation
The information in the table is taken from a country's national income accounts. income | US $ (millions) -------------------|--------...
What is a part of Keynesian economic analysis? A a liquidity trap below which interest rates are ineffective B an equilibrium price that always cle...
What will definitely increase a country's Gross National Product? A an increase in income taxes B an increase in the marginal propensity to import ...
According to the accelerator theory, what determines this year's net investment? A last year's consumption B last year's output C the change in las...
Which diagram shows an economy experiencing an increase in actual output but a decline in potential output? [Figure 27.1]
What is likely to follow if a central bank sets negative interest rates? A an increase in government revenue B an increase in the rate of inflation...
The Consumer Prices Index (CPI) fell by 3% in a year. Unemployment was regarded as unacceptably high. Which combination of policies would a governm...