Home > Economics O LevelVariant 2 May/June 2010 Report a question What’s wrong with this question? You cannot submit an empty report. Please add some details. 0% Variant 2 May/June 2010 1. Which statement about the factors of production is correct? The owner of a company is called labour. A river from which a company draws water is called land. Supervisors employed in a company are called enterprise. Raising finance for a company is called capital. 2. 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. What was the total cost to Barilla of producing pasta and bread in 2006? $3.0 bn $4.5 bn $2.1 bn $3.6 bn 3. 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 population growth rates different international exchange rates different climatic conditions different rates of inflation 4. What is a direct tax? a tax on imported goods a tax on income and wealth a tax on services a tax on electricity 5. Which policy would best enable a government to encourage greater specialisation in the use of its countryโs resources? encouraging diversification in industry subsidising job creation in rural areas protecting small businesses reducing tariffs on imports into its country 6. What name is given to the type of unemployment that occurs while people search for new jobs? cyclical frictional residual structural 7. 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 D B C 8. One of the functions of money is to act as a measure of value. What does this mean? Money allows people to save their surplus income. Money is used to compare the worth of different goods and services. Money allows people to borrow and lend. Money is used to buy goods and services. 9. The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $2 to $4? 0.5 2 1 0.2 10. A government achieves a high rate of economic growth. How may this conflict with other government aims? It may increase the volume of imports. It may increase incomes for the lower paid. It may increase government income. It may increase the supply of exports. 11. What is correct about a monopoly? Its costs are always higher than those of a firm in perfect competition. It may benefit from economies of scale. It sells only one product. It must be privately not state owned. 12. 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 rent of the land on which food is grown the reduction in investment the profit earned by farmers the wages of the farm workers 13. 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 replacement of the director of finance the minimum wage it must pay its workers the interest it pays on borrowed money health and safety laws 14. The retail price index of a country rose during a year from 200 to 240. What was the annual rate of inflation? 240 % 20 % 440 % 40 % 15. 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 movement of the supply curve to the right a surplus of bread a shortage of bread a movement of the demand curve to the right 16. 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. China has a smaller proportion of very rich people. Most of the population of India live on $1 a day. The average income in China is higher than that in India. 17. What is a function of a commercial bank? acting as the lender of last resort determining monetary policy providing overdrafts deciding what is a legal tender 18. 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 imports to the US from 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 exports from the US to South Africa 19. Which economic change would increase the problem of scarcity? a discovery of a new oil field a decrease in fish stocks an increase in labour productivity a reduction in waste 20. 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 includes more measures of living standards. It is measured in money terms. It includes international trade. 21. Which terms summarise the nature of the economic problem? finite resources and unlimited wants infinite resources and limited wants infinite resources and unlimited wants finite resources and limited wants an increase in economic growth a reduction in exports a reduction in employment an increase in inflation 23. A firm which sells its product for $6 has the following total costs. Which statement is correct? Average cost is lowest when 10 units are produced. The firm has no fixed costs. Total variable costs fall continuously over these outputs. The firm breaks even when 20 units are sold. 24. What is likely to happen in a developing country as it becomes more developed? A lower percentage of people will go to university. Average life expectancy will rise. The rate of population growth will increase. The tertiary sector will decline in importance. 25. In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? horizontal conglomerate vertical backwards vertical forwards 26. 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? A C D B 27. A person is most likely to save more when there is an increase in a countryโs exchange rate. money supply. interest rates. inflation rate. 28. What is an example of occupational mobility of labour? A Japanese car manufacturer locates in England. A nurse returns to work after her children have grown up. A student takes an evening job in a restaurant. Farm workers retrain as call-centre workers. 29. What is a function of a trade union? to promote workers to more responsible jobs to recruit workers for the firm to supervise the workers in the firm to negotiate workersโ contracts 30. The diagram shows a market for wheat that is in equilibrium. Which area represents the total revenue for wheat farmers? OWXY OVXY OTXY OVXZ Your score is The average score is 0% 0% Restart quiz
