9708 Economics November 2025 Question Paper 14

one that has zero opportunity cost

land labour enterprise capital wages rent profit interest

introduce tariffs on imported goods

O capital goods consumer goods Y X Z

In the short run all factors are fixed; in the long run all factors are varied.

availability of stocks

10400

price of fruit O quantity of fruit S2 S1 D1 D2 Y X What is the most likely cause of the equilibrium point moving from X to Y? a fall in real income and a depreciation of the exchange rate

providing incentives for government intervention to reduce income inequality

In the diagram, D and S represent the initial demand and supply conditions for a good. 10 D S S1 R S T U V W X Y Z price O quantity Which row correctly represents the change in consumer surplus and producer surplus if supply shifts to S1? producer surplus consumer surplus increases by S + T + U increases by U A falls by W + X falls by S + T B falls by Y + Z falls from S + T + U C falls to S + V falls to R D

Households cannot accurately value the benefits of a good.

The tax falls entirely on the consumer.

a charity hospital funded by public donations that offers free treatment to the rural poor

Higher paid workers maintain pay differentials.

They are paid to firms.

not in labour force unemployed employed

Additional productive capacity must be created.

import spending ($million) export spending ($ million) 100 100

indirect tax rates

income from abroad

an increase in income tax

rate of interest exchange rate budget deficit decreases depreciates decreases

an import quota to restrict the supply of goods

indirect

contractionary fiscal policy

outcome 2 outcome 1 government measure encourage illegal trade and corruption protect against import of harmful materials embargoes

terms of trade index (2018 = 100) year 101 104 109 2019 2020 2021 What can be concluded from the table? The quantity of imports rose relative to the quantity of exports.

Engaging in international trade enables the country to achieve a higher average standard of living.

the protection of consumers against excessive prices

US dollar–euro rate of exchange year 0.84 dollars per euro 2000 1.59 dollars per euro 2008 1.00 dollar per euro 2022 What would explain the changes in the US dollar–euro rate of exchange? changes in the supply and demand for dollars and euros in the foreign exchange market