Cambridge Past Paper Questions

The diagram shows attainable indifference curves, I₁ and I2, for good X and good Y. Which point represents the highest level of satisfaction curre...

In many developed economies, large and small firms often exist side by side in the same industry. What is most likely to explain the survival of t...

The diagram shows short-run (SRAC) and long-run (LRAC) cost curves for a firm. [Figure 8] Which statement is correct? A When each of the three SR...

What is most likely to rise as a firm expands? A energy costs per unit of output B the cost of components C the cost of monitoring workers D the r...

The table shows the main characteristics of employment in two occupations. occupation X occupation Y average annua...

How can GDP at market prices be calculated if GDP at factor cost is known? A add taxes, add subsidies B add taxes, subtract subsidies C subtract t...

Economists have proposed that the best policy to promote development is 'trade not aid'. What is implied by this proposal? A Developing countries...

The table shows the values of selected macroeconomic variables over a period. year 1 year 2 ...

What may lead to a reduction in bank lending in a country? A an increase in commercial banks' balances with the central bank B an increase in the ...

The government decides to raise the rate of Value Added Tax (General Sales Tax). What does this suggest is the government's main macroeconomic obj...

Loyalty and consumer behaviour Consumer loyalty can be thought of either in relation to card schemes which offer discounts based on the amount spe...

Explain the meaning of and whether there is a link

'A rise in wages and salaries will increase the costs of production, decrease profits, cause inflation and is detrimental.' Discuss whether the eco...

'The failure of the policy of quantitative easing (QE) to solve problems associated with an economic recession illustrates the weakness of monetary...

Amar Singh explained why he sells 'exotic' produce, such as broccoli and iceberg lettuce, at his vegetable stall in Mumbai. “I have to keep the cus...

Explain what is meant by 'market failure' and consider how far government intervention can reduce market failure.

A recent newspaper article commented on the fact that a pharmaceutical company charged customers in the United States (US) US$800 per treatment whi...

Cyclical and structural unemployment are the most common types of unemployment. Explain the causes of these types of unemployment and assess the ef...

Consumer loyalty can be thought of either in relation to card schemes which offer discounts based on the amount spent with a specific retailer, emo...

Which statement is the most valid reason for government intervention in a free market economy?

What would not be considered a barter transaction?

A factory introduces an automated production line to take advantage of division of labour. What is most likely to increase?

Which statement is normative?

A manufacturer progressively reduces the price of his product. The table shows the outcome of this policy. price ($) | total revenue 000s ($) ---...

The diagram shows a consumer's demand curve for a product. [Figure 7.1] How does consumer surplus change as the price of the product rises?

Following the introduction of a 10% increase in charges for car parking in a city centre, the demand for bus journeys per day into the city rose fr...

An economy is suffering from a housing shortage. The demand for housing continues to rise as real incomes increase and more construction firms ente...

A good has a price elasticity of supply of 2.0. The current quantity supplied is 300 units per week at a market price of $20 per unit. The firm rai...

What is a major function of the price mechanism?

The diagram shows the supply curve of a product. [Figure 12.1] The government imposes a specific indirect tax of $5 on the product. How will the p...

In the market for a good the quantity supplied (Qₛ) and the quantity demanded (Qᴅ) are given by Qₛ = P – 30 and Qᴅ = 240 – 2P where P = price in do...

Privatisation can be achieved by the sale of shares to the general public (public offers, PO) or by the direct sale to a private company (private s...

The diagram shows the market demand and supply curves for rice. [Figure 15.1] What would happen if a government imposed a maximum price of $10?

A government decides to replace a private company with its own company to collect household waste. Why could such action be justified?

Which measure would not be part of a government subsidy to protect domestic producers from competition?

A country's railways are currently run by private firms. It has been suggested that the government should nationalise the railways. What might be ...

What is likely to cause a decrease in aggregate demand?

A country maintains its foreign exchange rate against the United States dollar, within a narrow but changing band. What is this type of exchange r...

Which components are included in the financial account of the balance of payments? the balancing item | foreign direct investment | interest, prof...

Which argument is an importer most likely to use to gain the support of consumers for free trade?

According to US Consumer Prices Index (CPI) statistics, an identical good that cost $100 in 1913 would cost $2359.60 in 2013. What was the approxi...

The diagram shows an economy at full employment equilibrium. [Figure 24.1] Which short-run measures should the government take to maintain the econ...

Why does the value of a country's terms of trade have no monetary units?