Economics 0455/11 October/November 2025: question paper and mark scheme

Question

Consumers and producers face the same problem of satisfying wants. What is the most likely reason wants cannot be satisfied? A consumers and producers cannot establish an equilibrium price B consumers have excess choice when producers oversupply C consumers have limited income and producers have finite resources D consumers lack information to buy and producers lack motivation to supply

Question

A worker decides to leave their job as a bus driver and take a job as a lorry driver. What will increase the opportunity cost of this decision? A an increase in the holidays for lorry drivers B an increase in the income tax paid by bus drivers C an increase in the wages of bus drivers D an increase in the wages of lorry drivers

Question

The diagram shows a country's production possibility curve (PPC). food X Y PPC O machines What would cause a movement from point X to point Y? A decrease in productivity B decrease in unemployment C increase in capital investment D increase in economic growth

Question

The price of petrol increases in a country with a market economic system. What is a consequence of this? A More cars are bought. B The costs of road transport increase. C The quantity of petrol supplied falls. D There is a shortage of petrol.

Question

What determines a consumer’s demand for a product? the consumer’s the consumer’s the price of the willingness to buy income product the product A ✓ ✓ ✓ key B ✓ ✓ ✗ = yes C ✗ ✓ ✓ = no D ✓ ✗ ✓

Question

The diagram shows the market for a product. S U V P2 price P1 P3 X W D O Q3 Q1 Q2 quantity Which distance shows a market disequilibrium caused by excess supply? A U to V B U to X C V to W D X to W

Question

The price elasticity of demand (PED) of a good is –1. What will happen to both demand and total revenue as price increases? A demand will fall and total revenue will not change B demand will fall and total revenue will rise C demand will rise and total revenue will not change D demand will rise and total revenue will rise

Question

Which pair of economic institutions can be found in a market economy? A charities and public sector firms B multinational companies and commercial banks C public sector firms and private sector firms D stock exchanges and government-funded hospitals

Question

The table shows the weekly demand for, and supply of, good X at three prices. price demand supply ($) (tonnes) (tonnes) 20 16 10 30 12 12 40 10 14 What will be the effect if the government imposes a minimum price of $40 per tonne? A a fall in the price of X B a shortage of X C a surplus of X D no change in the market equilibrium

Question

What is the function of money when it is used to value goods and record transactions? A a medium of exchange B a standard of deferred payment C a store of wealth D a unit of account

Question

The table shows how household spending changes with income. income spending ($ per month) ($ per month) 4000 4150 4300 4375 4600 4650 4900 4900 5200 4975 5500 5275 What is the first level of income shown at which savings are positive? A $4000 B $4600 C $4900 D $5200

Question

The wages of school teachers are rising. What is least likely to be the cause of this? A decreased membership of teaching trade unions B increased awareness among parents about the importance of education C more restrictions on the immigration of teachers from other countries D the opening of new schools by the government

Question

What is a feature of every trade union? A members are unskilled workers B members use collective bargaining C members work for the same employer D members work in the same industry

Question

What must occur if a firm experiences economies of scale? A average costs decrease B profits decrease C the number of workers increases D total advertising costs decrease

Question

The diagram shows the costs of a firm. 60 cost ($ 000s) 50 40 30 20 10 0 100 output What is the firm's total variable cost at an output of 100 units? A $100 B $500 C $10 000 D $50 000

Question

If the average revenue of a firm increases from $4 to $5 and quantity demanded decreases from 20 units to 10 units, what will be the effect on the firm’s total revenue? A decreases by $20 B decreases by $30 C increases by $20 D increases by $30

Question

What are two macroeconomic aims of government? A to allocate resources and reduce trade union membership B to create economic growth and prevent high inflation C to raise interest rates and reduce pollution D to reduce exports and increase imports

Question

A government's spending currently equals its revenue. The government decides to decrease its spending. What is the most likely effect of this in the short run? A a budget deficit B a budget surplus C an increase in output D an increase in tax revenue

Question

What is not a monetary policy measure? A changes in income tax rates B changes in interest rates C changes in the exchange rate D changes in the money supply

Question

Which government action would not be included as part of a supply-side policy? A increasing the privatisation of industries B lowering national minimum wage rates C raising tariffs on international trade D reducing state benefits

Question

An economy operating on its production possibility curve (PPC) enters a recession that causes unemployment. As the recession gets worse some unemployed workers emigrate in search of jobs overseas. How are these effects of the recession shown on a diagram of the economy’s PPC in the short-term and the long-term? short-term effect on long-term effect on the PPC diagram the PPC diagram A movement to a point movement to a point inside the PPC inside the PPC B movement to a point shift of PPC to the left inside the PPC C shift of PPC to the left movement to a point inside the PPC D shift of PPC to the left shift of PPC to the left

Question

Chile specialises in the production of copper for export. In what way is the Chilean economy likely to be affected by a large rise in the supply of copper from other countries? employment economic growth A fall fall B fall rise C rise fall D rise rise

Question

The table shows the patterns of employment in selected industries in two years. employment in millions industry year 1 year 2 agriculture 8 6 fishing 4 4 hospitality 8 10 manufacturing 12 10 retailing 8 10 total 40 40 How did the patterns of employment change between year 1 and year 2? secondary sector tertiary sector A fell rose B fell unchanged C rose fell D unchanged rose

Question

What is deflation? A a sustained fall in total demand B a sustained fall in the general price level C a sustained fall in the rate of inflation D a sustained fall in the value of money

Question

What is most likely to cause more poverty in a country? A a decrease in the general price level B a decrease in the rate of income tax C a decrease in the level of unemployment D a decrease in the level of wages

Question

The charts show the population structure of a country in year X and year X + 50. age age 85+ 85+ 80–84 80–84 75–79 75–79 male 70–74 female male 70–74 female 65–69 65–69 60–64 60–64 55–59 55–59 50–54 50–54 45–49 45–49 40–44 40–44 35–39 35–39 30–34 30–34 25–29 25–29 20–24 20–24 15–19 15–19 10–14 10–14 5–9 5–9 0–4 0–4 3 2 1 0 0 1 2 3 3 2 1 0 0 1 2 3 millions millions year X year X + 50 During this period, how did birth and death rates change? birth rates death rates A fell fell B fell no change C rose fell D rose no change

Question

What is an advantage for consumers from international specialisation? A competition between firms results in lower prices B labour can move more freely between countries C less wealth is created throughout the world D multinational companies can increase their profits

Question

Which government policy would encourage greater international trade? A an increase in the level of domestic regulation B an increase in the level of tariffs on imports C the abolition of domestic subsidies for declining industries D the abolition of free trade agreements

Question

The US currently trades in oil with the UK. The discovery of new oil and gas deposits in the US will mean that its oil imports decrease and its oil exports increase. From the initial equilibrium point of X, which letter indicates the new equilibrium point for the US exchange rate? price of $ S1 B A S X S2 C D D1 D D2 O quantity of $

Question

What is most likely to directly result from a persistent and large current account surplus on the balance of payments of a country? A a lower exchange rate B a lower standard of living C an increase in gross domestic product D an increase in the unemployment rate