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Paper 1 SL Practice 1

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15 views4 pages

Paper 1 SL Practice 1

Uploaded by

Student Charlotte WONG, Charlotte
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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SPEC/1/ECONO/SP1/ENG/TZ0/XX

International Diploma
Diplôme International
Diploma Internacional

ECONOMICS
STANDARD LEVEL
PAPER 1

SPECIMEN PAPER

1 hour 30 minutes

_____________________________________________________________________________________

INSTRUCTIONS TO CANDIDATES

• Do not open this examination paper until instructed to do so.


• You are not permitted access to any calculator for this paper.
• Answer one question from section A and one question from section B.
• Use fully labelled diagrams and references to examples where appropriate.

3 pages
© International Diploma Organization 2012
-2- SPEC/1/ECONO/SP1/ENG/TZ0/XX

SECTION A

Answer one question from this section

Microeconomics

1. (a) The basic economic problem is one of scarcity of productive resources.


Explain how resources are allocated between competing uses in a market
economy. [10 marks]

(b) Discuss the view that there is strong justification for government intervention in
the market for health care. [15 marks]

2. (a) “World food prices have increased sharply over the past five years.” With the
aid of at least one diagram, explain how one possible demand factor and one
possible supply factor may have caused this increase. [10 marks]

(b) Consider the following two conflicting views:


“Food prices are best left to market forces.”
“Government should intervene to control rising food prices.”
Evaluate whether rising food prices should be left to market forces or controlled
by government. [15 marks]
-3- SPEC/1/ECONO/SP1/ENG/TZ0/XX

SECTION B

Answer one question from this section

Macroeconomics

1. (a) Describe the main causes of inflation. [10 marks]

(b) “If inflation is a major problem faced by governments it must follow that
the opposite, deflation, is desirable.” To what extent do you agree with this
statement? [15 marks]

2. (a) Identify the components of aggregate demand and briefly explain two factors
which might determine each of these components. [10 marks]

(b) Evaluate the likely impact on an economy of a substantial rise in the level of
interest rates. [15 marks]

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