0455 Economics June 2024 Question paper 11

free samples of a new product

A firm is deciding whether to produce good X or good Y for the next five years. The predicted revenue for good X is $20 000 per year and for good Y is$18 000 per year. What is the opportunity cost of producing good X? 2 D $100 000 C$90 000 A $18 000 B$20 000

O good Y good X M N What is the reason for the economy moving from point M to point N? decreased unemployment in industries producing good X

consumers’ incomes

S1 S2 O price quantity What is the most likely cause of this shift? a decrease in the costs of New Zealand’s airlines

decrease in the demand for tea

price elasticity of demand price between 0 and 1 falls

a monopolist supplying specialist goods to the market

a good which generates external benefits

They are of different ages.

O S

Labour productivity has decreased and production has decreased.

output 100 total variable costs ($) What happens to average total cost over this output range? It falls continuously.

$10 000 total cost$8000 total variable cost quantity What is the average fixed cost of the firm? $2000

backward vertical

the size of the firm economies of scale barriers to entry increases decrease decrease

full employment

tax rate year 2 (%) tax rate year 1 (%) income band ($) 0 to 4999 5000 to 9999 10 000 to 19 999 20 000 to 29 999 30 000 to 49 999 50 000+ What is most likely to have been the economic objective of the government in changing the tax rates between year 1 and year 2? to reduce a current account deficit

lower unemployment

any policy designed to decrease inflation

Farmers’ families consume most of their own produce.

the worker will accept the current wage rate the worker is prepared to work the worker does not have a paid job no no yes

What is most likely to increase when the rate of inflation gradually changes from 2% to 8% in one year? the cost of updating existing price lists

All workers get paid according to their level of productivity.

81–90 71–80 61–70 51–60 41–50 31–40 21–30 11–20 0–10 age group female male population / millions What is most likely to cause the population pyramid to be shaped in this way? death rate birth rate low low

life expectancy (years) Gross Domestic Product (GDP) ($ billion) population (million) 800 100

What is an advantage to a firm of specialisation at a national level? dependency on supplies from other countries

to decrease the competitiveness of domestic firms

O price of $ (in yuan) quantity P1 S1 D1 D2 P2 What is most likely to cause the demand curve for US dollars to shift from D1 to D2? a fall in Chinese interest rates

depreciate Brazil’s currency