Economics Paper

Topics: Tax, Inflation, Supply and demand Pages: 13 (2638 words) Published: August 16, 2013
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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Ordinary Level

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2281/12
May/June 2012 1 hour

ECONOMICS Paper 1 Multiple Choice Additional Materials: Multiple Choice Answer Sheet Soft clean eraser Soft pencil (type B or HB is recommended)

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READ THESE INSTRUCTIONS FIRST Write in soft pencil. Do not use staples, paper clips, highlighters, glue or correction fluid. Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided unless this has been done for you. There are forty questions on this paper. Answer all questions. For each question there are four possible answers A, B, C and D. Choose the one you consider correct and record your choice in soft pencil on the separate Answer Sheet. Read the instructions on the Answer Sheet very carefully. Each correct answer will score one mark. A mark will not be deducted for a wrong answer. Any rough working should be done in this booklet.

This document consists of 12 printed pages.
IB12 06_2281_12/3RP © UCLES 2012

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2 1 Economics is primarily concerned with A B C D 2 allocating scarce resources for unlimited wants. controlling unemployment and inflation. determining the level of government expenditure. studying how new wants and economic resources can be produced.

Which statement about the factors of production is correct? A B C D Capital includes factories and machinery but not roads and ports. Enterprise is more often found in the public sector rather than the private sector. Labour is the factor that takes risks and can become unemployed. Land is the natural factor that can be improved by human action.

3

A student leaves school and decides to spend the next two years at a college to improve her qualifications. What is the opportunity cost to the student of taking this decision? A B C D the cost of the course fees at the college the increase in job opportunities she will have as a result of her extra qualifications the lost production due to her not being in work the money she would have earned if she had been in work for the two years

4

What is true of a mixed economy but is not true of a free market economy? A B C D There is a mixture of agricultural, manufacturing and service industries. There is a mixture of central authorities, firms and consumers. There is a mixture of external benefits and private costs. There is a mixture of large and small companies.

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Journeys in city centres may be made by bus or by car. What is an external cost of this? A B C D bus fares car fumes and noise licence fees for cars purchase of buses

© UCLES 2012

2281/12/M/J/12

3 6 What is not held constant in constructing a demand schedule? A B C D 7 the incomes of consumers the prices of complementary goods the price of the good itself the tastes of consumers

The diagram shows the demand and supply curves for digital cameras. The original equilibrium point is X. What will be the new equilibrium point if these cameras become more fashionable and the rate of sales tax rises? supply B price A X D demand O quantity C

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The table shows the demand for chocolates at two different prices. price $ 0.50 0.45 quantity demanded 400 480

What is the price elasticity of demand when the price falls from $0.50 to $0.45? A B C D 9 less than 0.5 between 0.5 and 1 between 1 and 1.5 greater than 1.5

What is an example of market failure? A B C D a monopoly making abnormal profit prices charged to cover social cost the closure of small, independent shops in a rural area the inability of a car producer to achieve economies of scale

© UCLES 2012

2281/12/M/J/12

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4 10 What changes would move the equilibrium in the diagram from point X to a new point within area Z? S Z

price

X

D O quantity

A B C D

a decrease in demand with a decrease in supply a decrease in demand with an increase in supply an increase in...
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