ECONOMICS REVISION GUIDE FOR YEAR 11 STUDENTS WRITING IGCSE IN MAY/JUNE 2011
MCQ QUESTION PAPER 1
INTRODUCTION TO ECONOMICS
1 An unemployed worker accepts a job.
Which of the following is the opportunity cost of this decision?
A the cost of travel to work
B the income from the new job
C the leisure time lost
D the training in the new job
2 A hospital cannot treat all the people that need treatment. This is an example of
A excess supply.
B limited wants.
C scarcity.
D unlimited resources.
3 Which statement best explains why drought is an economic problem?
A Drought cannot be controlled.
B Rainfall is unreliable.
C The effects of drought involve the government.
D Water is a scarce good.
4 In 2002 the government of Zimbabwe diverted US$18 million, originally intended to support
private business, to help feed millions of people threatened by famine. Some of the money was
used to import up to 1.8 million tonnes of corn. What was the opportunity cost to Zimbabwe of this decision?
A the cost of the extra food
B the cost of the 1.8 million tonnes of corn
C the effect on private business
D the US$18 million
5 A factory working at full capacity is producing tennis racquets and golf clubs. The management
decides to produce fewer racquets and more clubs because of an increase in demand for golf clubs.
What is the opportunity cost of producing more golf clubs?
A the cost of retraining some workers to make golf clubs
B the cost of transporting and selling the extra golf clubs produced
C the materials bought to make extra golf clubs
D the tennis racquets that will not now be produced
6 Construction companies are building new houses on land previously used for farming.
What is the opportunity cost to society of this activity?
A improved living conditions
B less congestion in city centres
C more homes for new homeowners
D some farm output
7 An economy is producing at X.
What is the opportunity cost of choosing to produce at Y instead of X?
A 25 machines
B 50 units of food
C 75 machines
D 150 units of food
PRODUCTION
8 The table shows how employment in five industries changed in a country between 1985 and 2000.
According to the table, which type of employment has increased?
A primary
B secondary
C tertiary
D total
9 Which company operates in the primary sector?
10 A boat owner employs a crew to catch fish to sell on the market. Which factors of production are involved in
this activity?
A labour, capital and enterprise only
B land, labour and capital only
C land, labour and enterprise only
D land, labour, capital and enterprise
11 What is the most likely outcome of increased specialisation in a water bottling plant?
A higher costs per bottle
B higher wage rates
C increased job satisfaction
D increased output of bottles of water
12 An entrepreneur can use either capital or labour in the production process. The actual combination changes
as the prices of the factors alter. When is capital most likely to replace labour?
13 The central area of a country produces tea for which it has an ideal climate. The coastal area produces
coconuts because its climate is different. Assuming there is no change in market conditions, what will happen if
this country subsequently produces only tea in both areas?
A It will increase its costs of production.
B It will increase the productivity of its land.
C It will increase its total income.
D It will make the best use of its resources.
14 $2 bn is invested in developing a country’s natural resources and infrastructure.
Which two factors of production does this refer to directly?
A capital and labour
B capital and land
C enterprise and land
D labour and land
15 What makes specialisation easier?
A the imposition of taxation
B the protection of trade
C the system of barter
D the use of money
ECONOMIC SYSTEM
16 Economic growth in Russia and China used to be led by the public sector. Now it results more from
activities in the private sector. However, both sectors are important. Which term describes the current system in
Russia and China?
A market
B mixed
C planned
D subsistence
17 Which action is evidence that a country is a planned economy?
A A central bank plans an interest rate change.
B A government plans the allocation of all resources.
C A local authority plans a new library.
D A ministry of finance plans the annual budget
18 In a market economy, what does the entrepreneur decide?
A the combination of resources used
B the demand for the product
C the equilibrium price of the product
D the level of profits
19 China is changing from a centrally planned economy towards a market economy. How will the influence of
consumers and the government change?
consumers government
A decrease decrease
B decrease increase
C increase decrease
D increase increase
20 If a planned economy became a mixed economy, which industry would be most likely to remain
under government control?
A agriculture
B coal mining
C defence
D motor car production
21 A free market economy is more likely than a planned economy to encourage development because
A equality of income is encouraged.
B factors of production would be employed efficiently.
C government intervention uses taxes and subsidies.
D social costs are taken into consideration.
22 Each country of Southern Africa has a mixed economy.
Which statement about a mixed economy is correct?
A The government employs most primary sector workers.
B The government owns all major secondary sector industries.
C The government owns the transport network.
D The government provides public and merit goods.
HOW MARKET WORKS
23 The diagram shows the demand for chocolate.
What could cause the movement from point X to point Y?
A a change in tastes
B a fall in the price of chocolate
C an increase in income
D a successful advertising campaign for chocolate
24 The table shows the price of, demand for and supply of X per week.
What will be the effect if the government imposes a minimum price of $40 per tonne?
A a fall in the price of X
B a shortage of X
C a surplus of X
D a waiting-list for X
25 In many countries, extra staff are employed by the postal service and additional collections of
post are made to clear the large amount of mail before holiday periods.
What happens to the demand and supply curves for postal services during these periods?
26 The graph shows the market for rice. It was in equilibrium at X. Later, there is a very good harvest
of rice. What is the new equilibrium point?
27 The diagram shows the demand for and supply of a product. The original equilibrium is at X.
Which point indicates the new equilibrium position if there is an increase in the price of a close
substitute for the commodity while other things remain the same?
28 The diagram shows the demand for and supply of a firm's product. The original equilibrium is at X.
The firm pays for a successful advertising campaign. What is the new equilibrium?
29 The graph shows the market for unskilled workers in a city. The original equilibrium is at X.
What would be the new equilibrium if there was a migration of workers to the city?
30 What would not cause a shift in the demand curve for a good?
A a change in incomes
B a change in the price of a substitute good
C a change in the price of the good
D a change in the tastes of consumers
31 Four changes affecting the supply of a good are listed below. What would cause the supply curve to shift to
the right?
A an improvement in technology
B an increase in its market price
C a reduction in labour productivity
D the introduction of a sales tax
32 What is an example of complementary demand?
A buses and bus fares
B cotton and cotton seed
C televisions and electricity
D wood and sawdust
33 A good is successfully advertised.
What is the most likely impact on the demand and supply curves for the good?
demand curve supply curve
A shift to left shift to left
B shift to left shift to right
C shift to right shift to left
D shift to right shift to right
34 The diagram shows the supply and demand curves for a good. The market is in equilibrium at
point X.
What is the excess demand at price P?
A PT B QR C QT D ST
35 Tea and sugar are complementary goods.
What will happen if the price of tea falls, other things being equal?
A The demand curve for sugar will move to the right.
B The demand curve for tea will move to the right.
C The price of sugar will fall.
D The supply curve of sugar will move to the left.
36 The price of a good is temporarily above the market equilibrium price.
What must happen for the market to be brought back to equilibrium?
37 What is not held constant in calculating a demand schedule?
A the incomes of consumers
B the prices of complementary goods
C the price of the good itself
D the tastes of consumers
38 The table shows the demand schedule for maize.
What will happen if price rises from $5 to $6 per kilo?
A Total revenue will rise.
B Demand will rise.
C Total revenue will fall.
D Total costs will rise.
39 A demand curve for a product shows the relationship between its price and
A cost of production.
B population changes.
C the income of the consumer.
D the quantity of the product consumed
40 The following was printed in a magazine. More soft drinks are being consumed than ever before by the 16 –
34 age group. Schweppes, the drink manufacturers, claim that over 45 per cent of their soft drinks are now
being consumed without alcohol as people switch away from alcoholic spirits. How would this change be
represented on a demand and supply diagram for soft drinks?
A decrease in demand
B decrease in supply
C increase in demand
D increase in supply
41 Australian mines are among the world’s largest suppliers of uranium but the mines are contaminating
Australia’s natural environment. It is recommended that the mining companies install new equipment which
causes less pollution. If this is done, how would it be represented on a demand and supply diagram for uranium?
SOCIAL COSTS AND BENEFITS
42 In 2001 a government enquiry approved a major new air terminal for London, which will create
many new jobs. However, it will cause extra noise and pollution. Compensation will have to be
paid to some people whose houses will be demolished. What is not involved in this exploitation of
resources?
A externalities
B free market economy
C income creation
D opportunity cost
43 Which effect is an external benefit when a new motorway is built through the outskirts of a town?
A increased air pollution
B reduced accident levels
C reduction in property value
D the profits of the construction company
44 External benefits are
A private benefits minus private costs.
B private benefits plus social benefits.
C social benefits minus private benefits.
D social benefits plus social costs.
45More people decide to travel by bus and train rather than by car because government subsidies
result in reduced fares. What will be the effect on the private benefit for passengers and external benefit?
46 Which of the effects of economic development would be classed as an external cost?
A higher wages
B increased pollution
C increased production
D more advanced technology
MONEY AND FINANCE
47 What might increase the use of money as a medium of exchange?
A an increase in income tax
B an increase in interest rates
C an increase in savings
D an increase in specialization
48 Anything used as money must have
A a fixed supply.
B general acceptability.
C recognition as legal tender.
D value in itself.
49 What is the function of a stock exchange?
A It enables shareholders to sell their shares.
B It fixes fair prices for shares.
C It promises to buy unsold shares.
D It sets the number of shares.
OCCUPATIONS AND EARNING
50 What might explain why wages paid in a particular occupation are high?
A a large supply of labour
B a low price for the good produced
C a strong trade union
D pleasant working conditions
51 What is a non-wage factor that can affect an individual’s choice of occupation?
A bonuses
B commission
C long holidays
D overtime pay
52 Why is a surgeon likely to have a higher wage rate than a hospital porter?
A The surgeon has been in the job a longer time.
B The surgeon has a longer training period.
C The surgeon is older.
D The surgeon is in a trade union
53 What is an advantage for a worker in part-time rather than full-time employment?
A a higher wage
B greater employment protection
C more opportunity for other activities
D greater chance of promotion
54 What is likely to cause wages in an occupation to be low?
A a high level of responsibility
B high unemployment
C the need for special skills
D unpleasant working conditions
TRADE UNION
55 Which trade union action is most likely to have harmful effects on the productivity of a firm?
A acceptance of new technology
B agreement to a bonus system
C opposition to planned redundancies
D participation in a profit-sharing scheme
56 In 2002 the trade union representing workers on the London Underground public transport system called
strike. Which condition would make a strike least likely to be successful?
A The demand has to be met at a certain time.
B The product or service is regarded as a necessity.
C The union represents a high percentage of the workforce.
D There is a wide range of alternative services.
57 What is usually a function of a trade union?
A to determine the amount of dividend paid
B to negotiate wage levels with employers
C to recommend redundancies
D to take responsibility for organising sales of companies’ products
58 When will a trade union be most effective in pursuing its members' interests?
A The economy is in recession with rising unemployment.
B The employers have few orders for the product.
C The government passes a law to increase competition in the labour market.
D The members' wages make up a small part of total costs.
SPENDING, SAVING AND BORROWING
59 Nazmin Uddin works in a local office as a secretary three days a week. She lives with her parents
in a small apartment. Meer Ali owns a successful fitness centre that employs about twenty people and lives
in a large house. Which is likely to be true?
A Nazmin spends a smaller proportion of her income than Meer.
B Nazmin saves most of her income.
C Nazmin would find it easier than Meer to borrow money.
D Nazmin has a lower disposable income than Meer.
60 In a country, male workers on average earn more than female workers, although male and
female workers receive equal pay for equal work.What could explain this?
A Female workers are more experienced.
B Female workers are more likely to achieve promotion.
C Male workers are more likely to be in trade unions.
D Male workers have fewer qualifications.
61 The table shows the proportion of income saved for different age groups.
What can be concluded from this data?
A The youngest age group spends more than the oldest age group.
B The 50 - 62 age group saves the highest proportion of its income.
C The 50 - 62 age group has the highest level of income.
D The older age groups earn more than the younger age groups.
62 There is an increase in interest rates. What is the likely effect on saving and borrowing?
63 The table shows the percentage changes in income and consumer prices for four countries for
one year. Which country is likely to have experienced the greatest increase in real income during the year?
64 The table shows how three people spend their income.
Place the three people in the most likely order of income, from highest income to lowest income.
A X, Y, Z
B Y, Z, X
C Z, X, Y
D Z, Y, X
65 The table shows the weekly values of certain items for the average person in each group.
Which group saves the most on average?
66 ‘Between 1988 and 1998 the real income of the poorest 5 % of the world’s people fell by almost
25 %, while the real income of the richest 5 % increased by 12 %.’ What does this mean?
A Rich and poor people were equally affected.
B The poor lost 25 % of their money.
C The poor lost about twice as much money as the rich gained.
D The poor were relatively worse off in 1998 than 1988.
67 What would be most likely to encourage saving?
A a rise in the exchange rate
B a rise in the goods and services tax rate
C a rise in the income tax rate
D a rise in the interest rate
68 On a holiday island criminals have frightened away tourists. To give tourists confidence the government has
increased the number of police. What is likely to happen as a result of such action by the government?
A Overseas earnings fall.
B Public expenditure increases.
C Taxes fall.
D Unemployment increases.
69 A person has no outstanding debts. What might cause that person to save more and spend less from their
monthly income?
A a rise in the choice of products
B a rise in income tax
C a rise in interest rates
D a rise in the price of essential products
70 The government of Kenya wishes to help people with very low incomes. Which policy would achieve this?
A increasing housing subsidies
B increasing income tax
C increasing indirect taxation
D increasing inheritance tax
71 Which factor is likely to cause an increase in people’s savings?
A an increase in tax rates
B an increase in the interest rate
C a reduction in economic uncertainty
D a reduction in real wages
BUSINESS ORGANISATION
72 What is necessary for a company to be classified as a multi-national?
A It diversifies its range of products.
B It exports most of its output.
C It increases its scale of production.
D It produces some of its output in different countries.
73 A state-owned industry is sold to the private sector. The industry consists of a number of very large factories.
Which is the most likely change in business organisation to result from this?
A from private company to public corporations
B from public company to public corporations
C from public corporation to public companies
D from public corporation to private companies
74 The following table gives information about four companies. Which one of these companies is not a multinational company?
75 A business has two owners. They have limited liability. Its shares are not sold on the stock exchange.
What type of business is this?
A partnership
B private limited company
C public corporation
D public limited company
76 What would prevent an Egyptian company being classified as a multi-national company?
A It concentrates on one stage of production only.
B It employs only Egyptians as managers.
C It manufactures only in Egypt.
D It uses other firms to transport its goods.
77 Multi-national companies often set up business in developing countries. These countries benefit
in a number of ways. What effect could not be considered a benefit for a developing country?
A Investment in infrastructure is increased.
B More local workers are employed.
C New ideas and skills are introduced.
D Profits earned are sent abroad.
78 What is a characteristic of a public corporation?
A It issues shares to the general public.
B It is owned by the government.
C Its objective is to maximise profits.
D It is owned by more than twenty shareholders
79 What best describes a multi-national company?
A a company that is owned by the government
B a company that has many shareholders
C a company that trades internationally
D a company that produces in more than one country
80 The table gives information about four business organisations. Which organisation is most likely to be
described as a co-operative?
81 A French company employs French people, is located only in France, sells shares on the stock
exchange but uses other firms to transport its products to other countries. What type of company is this?
A a co-operative
B a private company
C a public company
D a multi-national
THEORY OF COST
82 The diagram shows the costs of a firm.
What is the firm's total variable cost at an output of 100 units?
A $100 B $500 C $10 000 D $50 000
83 In a company fixed costs are a high proportion of the total costs. What will result in the short run if
production is cut by 50 %?
A Average costs will rise.
B Fixed costs will fall.
C Total costs will remain constant.
D Variable costs will rise.
84 The table shows a firm’s average revenue and average cost. What level of output, A, B, C or D, gives
maximum profit?
85 The diagram shows the fixed costs, variable costs and total costs of a firm.
Which distance represents the firm’s fixed costs?
A PQ B PS C QR D QS
86 The table shows output and total costs of a firm with three workers.
How did output per worker and average cost change over the period?
87 A firm producing instant coffee previously paid for the disposal of the waste. It now sells the
waste to be made into garden fertilizer. Which cost to the firm has not changed?
A average cost
B fixed cost
C total cost
D variable cost
88 In 2003 Hewlett-Packard, a major computer company, announced that its profits had fallen below
the level predicted. What might have caused this?
A increased advertising costs that greatly improved sales
B low prices that made the company’s product competitive
C new technology that reduced costs
D reduced sales and low prices
89 Ericsson is the world’s leading maker of mobile phone machinery. It announced that it had won a
major contract to supply a Chinese phone company, China Mobile, with machinery. Ericsson also
announced that it would become more efficient by reducing its workforce.
How would economists classify these changes for the two companies?
90 A firm bottles 10 000 bottles of cola a week. Its fixed costs are $1000 a week. Its variable costs
are $0.50 a bottle. Each bottle of cola is sold for $1. What is the profit per bottle of cola?
A $0.40 B $0.50 C $0.60 D $0.90
91 A firm’s average revenue is $10. It sells 2000 units. What is the firm’s total revenue and the price of the
product?
GROWTH OF BUSINESS
92 The following extract appeared in a UK newspaper. ‘The UK construction firm Wimpey yesterday
announced an £85 million deal to buy two companies in the United States which supply its raw materials.
’Which term best describes Wimpey's actions?
A diversification
B horizontal integration
C vertical integration backwards
D vertical integration forwards
93 Wal-Mart, the world’s biggest food retailer, has acquired a large number of supermarkets.
What type of integration is this?
A conglomerate
B horizontal
C vertical backward
D vertical forward
ECONOMIES AND DISECONOMIES OF SCALE
94 Which is an external economy of scale?
A buying machines from other companies
B carrying out research with other companies
C lending money to other companies
D selling output to other companies
95 Why are firms making similar products often located near each other?
A Competition may be reduced.
B External economies may be possible.
C Land may be cheaper.
D Overheads may be increased.
96 What is happening when a firm is experiencing economies of scale?
A It has rising long-run average costs.
B It is operating in the short run.
C Its fixed costs are less than variable costs.
D Its output is increasing faster than its inputs
MACRO-ECONOMIC OBJECTIVES
97 What is not a main economic government objective?
A a balance of payments deficit
B economic growth
C full employment
D price stability
98 What is most likely to conflict with a government's aim of price stability?
A higher direct tax rates
B higher government spending
C higher interest rates
D higher unemployment
99Which aim of government policy is most likely to be achieved by an increase in interest rates?
A economic growth
B greater equality of income
C full employment
D price stability
TAXATION
100 The government puts a $2.00 tax on each $8.00 video tape sold. As a result, the price of a
video tape rises from $8.00 to $8.50. What can be concluded from this?
A The demand for video tapes is price inelastic.
B The government will receive only 25 % of its expected tax revenue.
C The incidence of the tax will fall mainly on the producer.
D The tax is progressive.
101 In a country where the government pays the unemployed a small weekly income, there is a reduction in
consumer expenditure and, as a result, unemployment increases. What will be the effect on tax revenue of
the government and on government expenditure?
102 Which is a description of indirect taxes?
A They are easy to avoid and deter effort.
B They are levied on income and cause inflation.
C They are levied on spending and are regressive.
D They are progressive and discourage consumption.
103 In a country, income tax is charged at $50 on an income of $500. Compared with this, which of the
following would indicate that the income tax scale was progressive?
A $150 tax on $2000 income
B $300 tax on $3000 income
C $450 tax on $4000 income
D $480 tax on $5000 income
104 Which statement describes a progressive tax?
A a tax that increases government income over time
B a tax that places an increasing burden on the poor
C a tax that rises in line with the rate of inflation
D a tax that has a higher rate as income rises
105 The graph shows the percentage of tax taken from different levels of income by four different
taxes. Which illustrates a regressive tax?
106 If a country places a tax on imports of food, which group in the country is most likely to benefit?
A consumers
B farmers
C food importers
D supermarkets
107 What is meant by the incidence of a tax?
A how the revenue raised by the tax is spent
B how the tax is collected
C why the tax is imposed
D where the burden of the tax is finally felt
108 When is the budget described as balanced?
A when direct taxes and indirect taxes are equal
B when exports and imports are equal
C when government spending and government revenue are equal
D when the demand for money and the supply of money are equal
INFLATION
109 In constructing a retail price index, what is not used?
A a base year
B the prices of a basket of goods
C the rate of interest
D a weight given to each good
110 Inflation in Argentina fell from 400 % in the 1980s to 15 % in the 1990s. What could have been a result of
this change?
A falling prices
B fewer exports from Argentina
C lower wage rises
D a trade deficit
111 The diagram shows the annual rate of inflation for a country between 2000 and 2003.
Which statement is true of the period 2000 to 2003?
A The cost of living fell.
B The price level rose.
C The retail price index fell.
D The value of money rose.
112 Why are weights used in the construction of a price index?
A Some prices tend to change according to the season.
B Some prices change more than others.
C Some goods are more expensive than others.
D Some goods take a greater proportion of total spending than others.
113 Which citizens are most likely to become worse off in a period of falling prices?
A those earning fixed incomes
B those saving at a fixed rate of interest
C those who have borrowed money at a fixed rate of interest
D those who have lent money at a fixed rate of interest
114 Why might policies to promote economic growth result in inflation?
A They increase competition.
B They increase saving.
C They increase spending.
D They increase unemployment.
115 The table shows some data about an economy.
What happened between Year 1 and Year 2?
A Both prices and real incomes fell.
B Both prices and real incomes rose.
C Prices rose but real incomes fell.
D Prices fell but real incomes rose.
116 What is most likely to lead to inflation?
A a decrease in consumer spending
B a decrease in employment in the public sector
C an increase in the cost of factor inputs
D an increase in income tax
UNEMPLOYMENT
117 Which of the following is an example of cyclical unemployment?
A An airline cuts jobs in a world recession.
B Cleaners lose their jobs as more machines are used.
C Fishermen sell their boats owing to a reduction in fish stocks.
D Hotels employ fewer people in the rainy period.
118Many fishermen are unemployed owing to long-term legislation to conserve fish stocks in the
North Sea.What type of unemployment is this?
A demand-deficient
B frictional
C seasonal
D structural
ECONOMIC GROWTH
119 Which of the following is likely to be a disadvantage of economic growth?
A Government tax revenue falls.
B Resources are depleted.
C The level of unemployment rises.
D The standard of living of the population falls.
120 The most common way of comparing the living standards of two countries is to study each
country’s
A average weekly working hours.
B consumer expenditure.
C GNP per head.
D national income.
121 Botswana has achieved high rates of economic growth.
What is most likely to have fallen as a result of this economic growth?
A employment
B income per head
C infant mortality rate
D literacy rates
122 The table gives information on the rate of economic growth in a country from 2001 to 2004.
What is likely to have fallen in this period?
A Gross Domestic Product
B imports
C prices
D unemployment
123 In March 2000 the Ministry of Trade and Industry in Singapore stated that Gross Domestic
Product grew by 5.4 % in the previous year. This produced higher revenues from taxation and
resulted in a budget surplus.What may be concluded from this statement?
A The change in Gross Domestic Product was caused by a change in taxation.
B The government had increased the rate of taxation and the expenditure on its services.
C The national income of the country had increased and so more was paid in taxes.
D There had been economic growth because the government had reduced its expenditure and
budgeted for a surplus.
124 Instead of cleaning their own homes, a large number of households decide to clean each other’s
homes and charge for their services. They all declare their income to the tax authority.
What will increase as a result of this?
A Gross Domestic Product
B imports
C investment
D unemployment
125 The bar chart shows details of three economic indicators of several Asian economies in year 1
and year 2. Which country improved its economic performance in all three indicators?
126 What might a government decrease if it wished to slow down the rate of growth in an economy?
A expenditure on defence
B goods and services (value added) tax
C interest rates
D the rate of income tax
127 Why might policies to promote economic growth result in inflation?
A They increase competition.
B They increase saving.
C They increase spending.
D They increase unemployment
DEVELOPING AND DEVELOPED ECONOMIES
128 What is usually found in a developing country?
A Primary products are important exports.
B The agricultural industry has high productivity.
C There is a high level of investment in education.
D There is a low birth rate.
129 In producing a table of economic statistics about a developed country (Italy) and a developing country
(Ethiopia) one pair of statistics has been placed in the wrong columns. Which is it most likely to be?
130 What is most likely to be found in a developing country?
A a large proportion of professional people
B a large proportion of income spent on entertainment
C a small proportion of very old people
D a small average family size
POPULATION
131 Many developed countries are faced with an ageing population. What is the likely result of this?
A a reduced dependency ratio
B increased mobility of labour
C increased spending on medical care
D reduced tax levels
132 The chart shows the birth rate and death rate in 1983 and 1993 in the European Union (EU) as a whole and
in Italy.
What does this chart show?
A The average age of the population rose in Italy but not in the EU as a whole.
B The birth rate remained above the death rate in the EU as a whole.
C The size of the population increased in the EU as a whole but not in Italy.
D People tended to live longer in Italy but not in the EU as a whole.
133 Other things being equal, what will cause a population both to increase and to age?
A a fall in the birth rate
B a rise in both the birth rate and the death rate
C a rise in the death rate and a fall in the birth rate
D a fall in the death rate
134 The table shows the working population and value of production in four areas of a country. The
government wants to encourage industrial development in the area with the lowest
productivity. Which area will it select?
135 Which aspect of population will be most likely to change when the importance of the tertiary
sector increases?
A the dependency ratio
B the geographical distribution
C the occupational distribution
D the total size
136 When must there be a rise in a country's population?
A when the birth rate is greater than death rate and there is net emigration
B when the birth rate is greater than death rate and there is no migration
C when the death rate is greater than birth rate and there is net immigration
D when the death rate is greater than birth rate and there is no migration
137 What is the most likely cause of population migration to cities in developing countries?
A an ageing population
B higher unemployment rates in cities
C higher wages in cities
D higher land values in cities
138 The table gives information on standards of living in four countries.
On the basis of this information which country has the highest standard of living?
A Brazil
B India
C Rwanda
D Uganda
139 What is the most likely cause of a fall in the population growth of a developing country?
A a decrease in the birth rate
B a decrease in emigration
C a decrease in immigration
D a decrease in the standard of living
INTERNATIONAL TRADE
140 In 2001 some countries, including India and Pakistan, criticized the European Union for continuing to
protect European farmers with a subsidy while expecting poorer African countries not to restrict trade.
Identify the concepts that are not involved in this situation.
A developing and developed economies
B free trade and protection
C market prices and official intervention
D multi-nationals and public corporations
14 1A country which itself produces copper puts a 10 % tariff on imports of copper.
What is likely to decrease in that country’s copper industry?
A the amount of investment
B the level of employment
C the price of copper
D the stock of copper reserves
142 Which of the following would cause a favourable change in the UK trade in services (invisible) account?
A A Malaysian company increases its exports to the UK.
B A Japanese company invests in a subsidiary in the UK.
C A large UK company increases its exports of goods.
D A UK company wins a contract to transport South African exports.
143 What is an effect of trade protection?
A It encourages home industries to be more efficient.
B It increases the demand for home produced goods.
C It reduces the price of home produced goods.
D It reduces the price of imports.
144 What encourages international specialisation?
A diseconomies of scale
B foreign exchange
C free trade
D quotas
145 The table gives selected details of the UK trade in goods in 1998 and 1999 in £ billion
What happened to the balance of trade in goods between 1998 and 1999?
A The deficit decreased.
B The deficit increased.
C The surplus decreased.
D The surplus increased.
146 In Indonesia the opportunity cost of producing timber is lower than in any other country. To protect the
environment, the Indonesian government decides to conserve its timber and ban timber exports.
What would happen in Indonesia to the balance of trade and external costs?
147 Assuming nothing else is changed, what will be the effect if a country imposes tariffs?
A increased import prices
B increased export prices
C reduced government revenue
D reduced home production