Cambridge & Pearson Edexcel Past Paper Questions

The table shows substitution and income effects for a normal good and for an inferior good as the price of the good changes. Which combination is c...

A government imposes a $10 tax on each unit produced of a product. How will this affect the firm? A Its average cost will rise by less than $10. B ...

According to oligopoly theory, what is not likely to characterise the behaviour of firms in the industry? A matching any price cuts made by their r...

The diagram shows the cost and revenue curves of a monopolist whose only cost of production is a fixed cost. What will be the monopolist's profit m...

Company R manufactures steel. Company S produces ships. Company T operates oil tankers. Company V operates cruise liners. Which statement is correc...

A monopolist chooses an output that maximises profits and makes normal profits. What must be correct at the output chosen? A Average cost equals av...

A firm operates in an imperfectly competitive market. The prices of its products are determined by the maximum price each consumer is willing to pa...

What is an argument for government policy which allows companies to take over other companies? A It allows firms to borrow from the banking system....

A government imposes a maximum price for electricity. Which statement justifying this measure might be considered valid on economic grounds? A It w...

The diagram shows the change in a market when a government places a production quota Qt on the quantity of a good that has previously traded at qua...

Which policy by a government would increase the negative externalities that result from cigarette smoking? A a ban on cigarette advertising B a ban...

A teacher currently earns $30000 but would be willing to continue to do the job provided she earned at least $25000. She prefers to stay in her tea...

What will increase the power of a trade union, allowing it to increase wages without reducing the employment of its members in a particular industr...

The table shows the number of workers employed by four firms in the same industry, the average number of hours worked each day and the total output...

Which stage of the business (trade) cycle is most likely to be characterised by an increasing negative output gap? A boom B recession C recovery D ...

Which characteristics are typical features of the least developed countries? dominant sector of industry export earnings terms of trade over time A...

What is central to economic growth but not necessarily to economic development? A an expansion of the range of economic choices available to indivi...

What would be the essential element in listing countries in order of their standards of living during a particular year? A a deduction for profits ...

A government wished to increase demand in an economy in an attempt to reduce unemployment. Which policy is most likely to achieve this? A establish...

What would be an increase in leakages or withdrawals from the circular flow of income? A increase in government spending on anti-smoking campaigns ...

What is used to measure the deflationary gap? A the increase in injections needed to reach full employment B the public sector borrowing requiremen...

The following data describes an economy's consumption function. income (m) consumption (m) 100 90 140 122 180 154 220 186 What can be deduced about...

In which circumstance will there be an immediate increase in the domestic money supply? A A consumer takes advantage of an overdraft facility to bu...

The turning point on the Kuznets Curve for income inequality has been estimated to be in the region of US $10500. For a country that has a GDP per ...

Which macroeconomic policy aims are most likely to complement one another? A high growth and low inflation B high growth and low unemployment C low...

All else remaining unchanged, what would result in an outflow of capital funds from a country? A a fall in the country's rate of inflation B an exp...

Problems in the steel industry By 2016, China's steel industry had expanded rapidly and accounted for just over half of world production but China'...

The UK Government has established a behavioural insight team known as the 'nudge unit,' which attempts to change consumer behaviour by persuasion.

Explain what is meant by equity, allocative efficiency and Pareto optimality. Consider whether they are linked.

In 2016, a country's largest yacht builder said it would have to make 350 people redundant. The company, which builds luxury yachts, said demand ha...

Distinguish between the transactions demand for money and the speculative demand for money. Consider which is likely to be more important for a con...

Explain the difference between autonomous investment and induced investment. Consider whether there is a link between these two types of investment.

Some developing countries pursue export-led growth and argue that the overall growth of the economy can be generated not only by increasing the amo...

Which outcome depends upon the division of labour?

'An increase in consumption by one person leaves the benefits available to others undiminished'. Which good does this statement define?

The diagram shows a production possibility curve for a farmer. The original position is X. If the farmer switches some of his land from producing p...

A student buys a flute for $80 but then is unable to learn to play it. It has a resale value of $50, while the shop retail price of the same type o...

The diagram shows a supply curve for beef. What explains why the supply curve for beef slopes upwards?

A theatre increases the price of its tickets from $10 to $15. As a result, its total receipts decrease from $10000 to $6000. Within what range does...

A taxi firm raises fares at its busiest times by as much as five times the normal fare. Taxi drivers and customers are notified of the changes by m...

The table shows Shanaz's and Sunil's price elasticity of demand for restaurant meals and theatre tickets. There is a rise in the price of restauran...

The diagram shows the demand curve for a normal product. Which two points indicates a move from a price inelastic point to a less inelastic point?

In the diagram, the supply of a product increases while the demand curve does not shift. Which row correctly identifies the resulting impact on con...

The diagram shows the market demand and supply for a good. Which statement is not valid?

For which supply curve is the value of price elasticity of supply not the same at all points on the curve?

Producer surplus is the difference between

A government wishes to raise the incomes of farmers without raising the price of food to consumers. Which policy should it use?

The diagram shows the demand and supply of rice. Supply increases from S₁ to S2. What is the change in sales revenue received by the rice farmer?

Money is paid by the government to an unemployed worker in the form of a benefit. Why is this called a transfer payment?

What describes a regressive tax?