9708 Economics November 2025 Question Paper 34

an ability to detect price cuts by rivals

good Y good X O I1 I2 What do indifference curves indicate? Consumers get more satisfaction on curve I1 from consuming more of X and less of Y.

A firm manufacturing computers merges with a firm that manufactures furniture.

O price, costs X Y output MPC MSC MPB MSB Which row shows the correct combination of production and consumption externality when economic welfare is maximised? consumption externality production externality position of economic welfare negative negative X

average fixed cost

price volatility

maximising consumer surplus

higher levels of competition

A firm that installs ramps to its workplace to improve the access for people with disabilities.

female wages male wages decrease decrease

It boosts the morale of workers and enhances labour productivity.

job security

national minimum wage in real terms individual’s tax-free allowance for income tax increase decrease

wage O labour W L S

Aggregate demand is greater than the maximum potential output of the economy.

expenditure on imports

$150 billion

increasing the national minimum wage

an increase in government spending on new infrastructure such as roads

rate of interest quantity of money O LP1 LP2 What would cause the liquidity preference curve to shift from LP1 to LP2? There has been a fall in national income.

the relationship between economic growth and employment

deregulation

to attract highly skilled workers from abroad

when the economy was experiencing a high level of inflation

the amount of tax revenue received at each tax rate

horizontal (X) axis variable vertical (Y) axis variable cumulative % of families cumulative % of income

increased discrimination

acquiring improved technology

an increase in subsidies given to exporters

It encourages competition, reduces prices and forces the less efficient domestic firms to leave the market.