Home > Economics O LevelVariant 1 May/June 2010 Report a question What’s wrong with this question? You cannot submit an empty report. Please add some details. 0% Variant 1 May/June 2010 1. A government achieves a high rate of economic growth. How may this conflict with other government aims? It may increase incomes for the lower paid. It may increase the volume of imports. It may increase government income. It may increase the supply of exports. 2. Which statement about the factors of production is correct? Raising finance for a company is called capital. Supervisors employed in a company are called enterprise. A river from which a company draws water is called land. The owner of a company is called labour. 3. Which economic change would increase the problem of scarcity? a discovery of a new oil field decrease in fish stocks an increase in labour productivity a reduction in waste 4. The diagram shows the demand for and the supply of bread. A maximum price P1 is fixed by the government. What is likely to be the immediate result of this? a shortage of bread a movement of the supply curve to the right a movement of the demand curve to the right a surplus of bread 5. The diagram shows a market for wheat that is in equilibrium. Which area represents the total revenue for wheat farmers? OWXY OVXZ OTXY OVXY 6. There was an increase in the value of the United States (US) dollar against the South African Rand. What is a result of this? an increase in the number of exports from the US to South Africa more people from South Africa spend holidays in the US fewer people from the US spend holidays in South Africa an increase in the number of imports to the US from South Africa 7. A person is most likely to save more when there is an increase in a countryโs inflation rate. money supply. interest rates. exchange rate. 8. What is an example of occupational mobility of labour? A student takes an evening job in a restaurant. A nurse returns to work after her children have grown up. A Japanese car manufacturer locates in England. Farm workers retrain as call-centre workers. 9. Which policy would best enable a government to encourage greater specialisation in the use of its countryโs resources? protecting small businesses reducing tariffs on imports into its country subsidising job creation in rural areas encouraging diversification in industry 10. What name is given to the type of unemployment that occurs while people search for new jobs? structural frictional residual cyclical 11. In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? conglomerate horizontal vertical backwards vertical forwards 12. The retail price index of a country rose during a year from 200 to 240. What was the annual rate of inflation? 40 % 20 % 440 % 240 % 13. What is correct about a monopoly? Its costs are always higher than those of a firm in perfect competition. It must be privately not state owned. It may benefit from economies of scale. It sells only one product. 14. The diagram shows the market for fresh fish in the Caribbean with equilibrium point X. New, more efficient boats with lower running costs are then used. Which point represents the new equilibrium? A B C D 15. What is likely to happen in a developing country as it becomes more developed? The rate of population growth will increase. Average life expectancy will rise. A lower percentage of people will go to university. The tertiary sector will decline in importance. 16. What is a function of a commercial bank? deciding what is a legal tender acting as the lender of last resort determining monetary policy providing overdrafts 17. Between 2002 and 2007, approximately 18 million Latin American households moved out of poverty. Which change in the region is most likely to have caused this fall in poverty? a reduction in employment an increase in inflation an increase in economic growth a reduction in exports 18. Gross Domestic Product (GDP) per capita is commonly used as an indicator of the comparative level of development in different countries. What does not lead to difficulties when using this as a comparison between countries? different international exchange rates different population growth rates different rates of inflation different climatic conditions 19. The directors of a firm have to discuss the following topics. Which topic is least likely to be directly affected by the governmentโs influence on the firm? the minimum wage it must pay its workers the interest it pays on borrowed money health and safety laws the replacement of the director of finance 20. One of the functions of money is to act as a measure of value. What does this mean? Money allows people to borrow and lend. Money is used to compare the worth of different goods and services. Money allows people to save their surplus income. Money is used to buy goods and services. 21. South African companies are planning to undertake major investment in Zimbabwe in order to mine platinum. If this investment occurs, what would happen in the short term to the supply of platinum, the price of platinum and the profits of the companies? D C A B 22. Why is the Human Development Index (HDI) a better indicator of comparative living standards than Gross Domestic Product (GDP) per head? It is more directly linked to economic growth. It is measured in money terms. It includes more measures of living standards. It includes international trade. 23. Which terms summarise the nature of the economic problem? finite resources and unlimited wants infinite resources and unlimited wants finite resources and limited wants infinite resources and limited wants 24. The government of a country with a rapidly increasing population decides to switch resources from investment to increased subsidies to farmers. What is the opportunity cost of this decision? the reduction in investment the profit earned by farmers the wages of the farm workers the rent of the land on which food is grown 25. A firm which sells its product for $6 has the following total costs. Which statement is correct? The firm has no fixed costs. Average cost is lowest when 10 units are produced. The firm breaks even when 20 units are sold. Total variable costs fall continuously over these outputs. 26. Barilla, an Italian company, is the worldโs largest pasta maker. It also produces bread. In 2006 its bread production contributed $1.5 billion (bn) to its total revenue of $5.1 bn. Overall profit was $0.6bn. $4.5 bn $3.0 bn $3.6 bn $2.1 bn 27. What is a direct tax? a tax on income and wealth a tax on services a tax on imported goods a tax on electricity 28. The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $2 to $4? 1 0.2 2 0.5 29. What is a function of a trade union? to recruit workers for the firm to negotiate workersโ contracts to promote workers to more responsible jobs to supervise the workers in the firm 30. India has a more evenly distributed income than China but a greater proportion of its population living on less than $1 a day. What can be concluded from this statement? India has a greater proportion of poor people. Most of the population of India live on $1 a day. China has a smaller proportion of very rich people. The average income in China is higher than that in India. Your score is The average score is 0% 0% Restart quiz