9708 Economics 2023 Specimen Question Paper 1

The demand for a product is inversely related to its price, ceteris paribus. What does ceteris paribus mean in this context?

What is likely to be introduced in the market for bus travel if an economy moves from a mixed economy to a market economy?

The diagram shows that the production possibility curve (PPC) of maize and beans has changed from PPC1 to PPC2. 100 100 200 output of beans (tonnes) output of maize (tonnes) PPC2 PPC1 What has happened to the opportunity cost of maize and the returns to factors producing beans? opportunity cost of maize returns to factors producing beans

An individual buys a ticket to visit a government-owned art gallery. How would this visit be classified by an economist?

The diagram shows a shift in a firm’s supply curve from S1 to S2. O price quantity S2 S1 What may have caused the shift from S1 to S2?

What is not an example of the role of the factor enterprise in a modern economy?

A manufacturer increases the price of a product from $4 in an attempt to increase total expenditure on the product. The table shows the outcome of the policy. price ($) total expenditure 000s ($) 400 500 600 What is the price elasticity of demand for the product?

A firm establishes that the price elasticity of supply of its product has a value of 0.3. What is likely to be true about the firm?

The diagram shows the market for oil. The original equilibrium price is P. O S1 P4 P3 P2 P1 P S2 D2 S D1

The demand for a good falls at the same time as its costs of production decrease. What will be the combined effect of these changes on the price and on the quantity supplied of the good? price quantity supplied

A government imposes a specific indirect tax on a product. When will the tax cause the greatest reduction in consumer surplus for the buyers of the product?

The table shows the maximum amount three students would each be willing to pay for a taxi to take them home from a nightclub. $Jane 10.00 Sara 8.00 Yasmin 6.00 The fare for the taxi is$12. Assume they share the taxi fare as shown in the table below. Which row shows how much they each should pay so that they each obtain the same consumer surplus? Jane $Sara$ Yasmin $

A government fixes a minimum price for a service. What will be the outcome of such a policy?

The diagram illustrates the effects of placing a specific indirect tax equal to JM on a good. price quantity O J L M K

The diagram shows the demand curve, D1, and the supply curve, S1, for a good. D2 S3 S4 S1 S2 D1 O quantity price The government decides to pay producers a specific subsidy for each unit supplied to the market. Which curve shows the new effective demand or supply curve?

Planned government expenditure for a country in the fiscal year 2016 is estimated at $760 billion. The top five areas of expenditure are given in the table.$ billion pensions 153 healthcare 138 welfare 111 education defence total top five 536 What is the total amount, in billions of dollars, spent on transfer payments shown in the table?

The diagram shows a shift in the Aggregate Demand curve, from AD1 to AD2. O price level real output AD1 AD2 What might have caused this shift?

The diagram shows the change in an economy’s rate of inflation over 4 years. year inflation rate (%) What happened to the general price level over the 4 years? year 1 year 2 year 3 year 4

The diagram shows the short-run Aggregate Supply (SRAS) curve of an economy. At which equilibrium level of national income is a reduction in the rate of interest likely to cause the greatest inflationary increase for the economy? price level O

A large coal mine is forced to close because of falling demand for coal as consumers switch to less polluting fuels. The government organises retraining courses and recruitment events for the coal mine workers. Which type of unemployment is the government trying to reduce?

A government succeeds in changing a current account deficit into a current account surplus. Why might this current account surplus increase the country’s inflation rate?

The diagram shows a government’s revenue and expenditure for three years. 2008 2009 2010 revenue expenditure revenue expenditure revenue expenditure $m What can be concluded from the diagram?

In recent years an economy has experienced changes in its price level as shown. 2010 2015 –2 percentage change of price level Which government policy is most effective in reversing the trend shown in the price level?

The diagram shows Greece’s trade position with the EU and Russia between 2005 and 2014. 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 imports from EU exports to EU imports from Russia exports to Russia key Greek trade $bn What can be concluded about the period 2005 to 2014?

There is a rise in the exchange rate of the US$. Which would cause the greatest increase in the US current account deficit?

Since 2000 a country’s export prices have increased on average by 50% and its import prices by 25%. What is the current figure for the country’s terms of trade (2000 = 100)?

Each diagram shows the production possibility curves (PPCs) of two economies, X and Y, which produce food and clothes. In which diagram would both economies benefit by specialising in the good in which they have comparative advantage and trading at an exchange rate of 1 unit of clothes to 1.5 units of food?

Which government policy is most likely to focus on an increase in the quantity of skilled labour?

A small trading country decides on a policy of import substitution by producing more goods and services itself rather than purchasing them from other countries. What is the most likely reason for this policy?

The monetary authorities of a country, whose currency is floating freely, raise the market rates of interest. Other things being equal, the exchange rate of the currency is most likely to