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. 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? B D A C 2. The diagram shows a market for wheat that is in equilibrium. Which area represents the total revenue for wheat farmers? OVXY OVXZ OWXY OTXY 3. 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 exports an increase in economic growth a reduction in employment an increase in inflation 4. 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 health and safety laws the interest it pays on borrowed money 5. A person is most likely to save more when there is an increase in a countryโs inflation rate. interest rates. money supply. exchange rate. 6. What is a function of a trade union? to promote workers to more responsible jobs to negotiate workersโ contracts to recruit workers for the firm to supervise the workers in the firm 7. What is a direct tax? a tax on services a tax on income and wealth a tax on imported goods a tax on electricity 8. Which terms summarise the nature of the economic problem? infinite resources and limited wants finite resources and limited wants infinite resources and unlimited wants finite resources and unlimited wants 9. 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? Most of the population of India live on $1 a day. China has a smaller proportion of very rich people. India has a greater proportion of poor people. The average income in China is higher than that in India. 10. Why is the Human Development Index (HDI) a better indicator of comparative living standards than Gross Domestic Product (GDP) per head? It includes more measures of living standards. It is measured in money terms. It is more directly linked to economic growth. It includes international trade. 11. What is a function of a commercial bank? deciding what is a legal tender determining monetary policy providing overdrafts acting as the lender of last resort 12. 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 demand curve to the right a shortage of bread a surplus of bread a movement of the supply curve to the right 13. There was an increase in the value of the United States (US) dollar against the South African Rand. What is a result of this? more people from South Africa spend holidays in the US an increase in the number of exports from the US to South Africa fewer people from the US spend holidays in South Africa an increase in the number of imports to the US from South Africa 14. What is likely to happen in a developing country as it becomes more developed? A lower percentage of people will go to university. The rate of population growth will increase. The tertiary sector will decline in importance. Average life expectancy will rise. 15. 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 rates of inflation different climatic conditions different population growth rates different international exchange rates 16. The diagram shows the supply curve for a good. What is the price elasticity of supply when the price rises from $2 to $4? 2 1 0.2 0.5 17. Which statement about the factors of production is correct? A river from which a company draws water is called land. The owner of a company is called labour. Raising finance for a company is called capital. Supervisors employed in a company are called enterprise. 18. One of the functions of money is to act as a measure of value. What does this mean? Money is used to compare the worth of different goods and services. Money is used to buy goods and services. Money allows people to save their surplus income. Money allows people to borrow and lend. 19. 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 profit earned by farmers the reduction in investment the rent of the land on which food is grown the wages of the farm workers 20. 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. $2.1 bn $4.5 bn $3.0 bn $3.6 bn 21. Which economic change would increase the problem of scarcity? a reduction in waste decrease in fish stocks a discovery of a new oil field an increase in labour productivity 22. The retail price index of a country rose during a year from 200 to 240. What was the annual rate of inflation? 240 % 20 % 40 % 440 % 23. 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 24. 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. 25. A government achieves a high rate of economic growth. How may this conflict with other government aims? It may increase government income. It may increase the volume of imports. It may increase incomes for the lower paid. It may increase the supply of exports. 26. Which policy would best enable a government to encourage greater specialisation in the use of its countryโs resources? encouraging diversification in industry reducing tariffs on imports into its country subsidising job creation in rural areas protecting small businesses 27. What is an example of occupational mobility of labour? 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. A student takes an evening job in a restaurant. 28. What name is given to the type of unemployment that occurs while people search for new jobs? residual frictional structural cyclical 29. What is correct about a monopoly? It may benefit from economies of scale. It sells only one product. It must be privately not state owned. Its costs are always higher than those of a firm in perfect competition. 30. In August 2008, Infosys, an Indian information technology company, bought Axon, a UK information technology company. Which type of integration is this? vertical backwards conglomerate horizontal vertical forwards Your score is The average score is 0% 0% Restart quiz