(576 42KB) 11ecogrp

1. Country Z operates with a production possibility curve (PPC).
Currently, output is at combination

1.
Which movement has zero opportunity cost in terms of the goods produced?
A 1 to 2. B 1 to 3 C 2 to 3 D 3 to 4
2. The diagram shows a demand curve for pineapples. What happens to the value of price
elasticity of demand (PED) when there is a movement from point X to point Y and what
describes the value of PED at point Y?
..
3. In the diagram, the supply curve shows the number of spaces in a car park and the demand
curves show the demand for spaces on four different days, D1, D2, D3 and D4.
The owner wishes to charge a parking fee on each of these days to allocate the spaces according
to the market mechanism. Which pricing policy should the owner use?
A set a fixed price at P1
B set a fixed price at P4
C vary prices between P2 and P3.
D vary prices between P1 and P4
4. In the diagram, S1 is the supply curve and D1 is the initial demand for facemask X. A rival firm
produces facemask Y, which is a close substitute.
What would cause the demand curve to shift to D2?

A a decrease in the costs of the materials to make facemask X
B a decrease in the costs of the materials to make facemask Y
C an increase in the price of facemask X.
D an increase in the price of facemask Y
5. A government has increased output with no effect on the price level.
What must have been the initial level of aggregate demand (AD)?
A AD1 B AD2 C AD3 D AD4.
6. The diagram shows the production possibility curves (PPCs) for country X and country Y, the only
two countries in the world. Both countries produce just two goods, M and N.
Under which terms of trade will both country X and country Y benefit from trading with each
other?
A 1M for 0.75N. B 1M for 0.8N C 1M for 1N D 1M for 2N
7. The government of a country plans to raise income tax rates. The initial equilibrium for the
country is represented by point X on the diagram. Which new equilibrium point would an
economist predict as the result?....
8. PPC is the production possibility curve in country T.
Which changes take place in country T’s opportunity costs of producing X as it increases
production of X?
A Opportunity costs are constant between points 1 and 2, and between points 3 and 4
B Opportunity costs decrease between points 1 and 2, and increase between points 3 and 4
C Opportunity costs decrease between points 1 and 2, and between points 3 and 4.
D Opportunity costs increase between points 1 and 2, and between points 3 and 4
9. In the diagram, D and S represent the demand for and supply of smartphones. Many
components used in the production of smartphones are imported. The initial equilibrium is at
point X. The exchange rate has depreciated at the same time as the price of a complementary
good decreased. Which point in the diagram could represent the new equilibrium?..
10. The diagrams show the demand for and the supply of houses. In the short run, the stock of
houses for sale, S1, is fixed. A government decides to allow some agricultural land to be used for
building houses and subsidises lower-income buyers of the new houses. Which diagram shows
the long-run situation?....
11. The graph shows the rate of inflation in Japan from April 2020 to February 2021.
Over which period did disinflation occur in Japan?

A July 2020 to February 2021.
B July 2020 to September 2020
C October 2020 to December 2020
D October 2020 to February 2021
12. The diagram shows three production possibility curves (PPC) for a country, labelled 3, 2 and 1.
The original PPC for the country is 2. This country experiences a fall in its working population
and then this is followed by a long period of recession.
If an increase in GDP then takes place, what is the increase in production?
A r to s B r to u C s to t D t to u.
13. A government wants to reduce inflation. It has decided to cut government spending by $1bn.
The diagram shows different starting positions for the country’s aggregate demand (AD) curve.
Which starting position for the aggregate demand curve would make this policy least effective?
A AD1 B AD2 C AD3 D AD4.
14. The diagram shows the change in a country’s production possibility curve from XX to YY.
What would explain this change?

A Consumers chose to consume more food and less drink
B Government taxed food production and subsidised drink production.
C Productivity rose in food production and fell in drink production
D There were more imports of food and more exports of drink
15. The diagram shows the European market for diesel fuel and the original equilibrium is at M.
Europeans want low-emission cars and therefore the demand for diesel fuel has decreased from
D1 to D2. Which area represents the new producer surplus for companies supplying diesel fuel?
A GMNH B JGM. C JHN D JNR
16. Golf club membership fees in Singapore have risen as a result of restrictions on travel to cheaper
golf courses in neighbouring countries and the closure of some local courses. The supply of golf
club memberships is determined by the current number of courses. If the original equilibrium
was at X, which point shows the result of these changes?..
17. The diagram shows the demand and supply curves for solar energy in India. The initial
equilibrium point is at X. The Indian government increases the subsidy to solar energy
producers. At the same time, there is a rise in the price of alternative sources of energy. What is
the new equilibrium position?..
18. A specific tax is placed on the sale of bottles of lemonade. In the diagram, S is the supply curve
before imposition of the tax and St is the supply curve after tax.
Which distance represents the specific tax on each bottle?

A UT. B WT C WU D WX
19. The diagram shows the demand and supply curves for a good.
The government fixes a maximum price of OP1. What would happen?

A Consumers would have to be rationed to quantity OQ1.
B The government would have to introduce a subsidy of PP1..
C The market equilibrium quantity OQ would be demanded and supplied.
D The supply of quantity OQ2 would be guaranteed.
20. The diagram shows the aggregate demand (AD) and aggregate supply (AS) for an economy.
Which changes in subsidies and indirect taxes would have caused the change from AS1 to AS2?
A higher subsidies and higher indirect taxes
B higher subsidies and lower indirect taxes.
C lower subsidies and higher indirect taxes
D lower subsidies and lower indirect taxes

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1. Country Z operates with a production possibility curve (PPC).

Currently, output is at combination

What would cause the demand curve to shift to D2?

5. A government has increased output with no effect on the price level.

8. PPC is the production possibility curve in country T.

Over which period did disinflation occur in Japan?

If an increase in GDP then takes place, what is the increase in production?

What would explain this change?

Which distance represents the specific tax on each bottle?

The government fixes a maximum price of OP1. What would happen?

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