PODAR INTERNATIONAL SCHOOL (IB & CAMBRIDGE)

Chapter 7 Demand
1. The graph shows the market for bread.

Which of the following might have caused a change in demand from D1 to D2?
A. a fall in the cost of producing bread
B. a fall in the price of an alternative to bread
C. a newspaper report that eating bread is healthy
D. a rise in price of a complement to bread

Chapter 8 Supply
1. 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

Chapter 11:- Price elasticity of demand

1. The price elasticity of demand for a good is unitary. What would be the effect of a 1 %
fall in its price?
A. to increase total revenue by 0.1 %
B. to leave quantity demanded unchanged
C. to leave total revenue unchanged
D. to reduce quantity demanded by 1 %
Chapter 12:- Price Elasticity of Supply
1. The diagram shows the supply curve for a good.

What is the price elasticity of supply when the price rises from $2 to $4?
A- 0.2 B- 0.5 C- 1 D- 2

2. Which change would make the supply of a product more price elastic?
A- an increase in the number of close substitutes for the product
B- an increase in the proportion of firms working at full capacity
C- a reduction in the time taken to make the product
D- a reduction in the time that the product can be stored
Chapter 29 Economic growth
1. 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? Ans:- C

Chapter 30 Employment and unemployment

1. Each year, extra cleaning staff were employed by a hotel on a temporary basis during the
busy holiday period. They were not employed when the hotel was not busy. What type of
unemployment occurred when the hotel was not busy

A. Cyclical
B. Frictional
C. Seasonal
D. Technological

2. 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.

3. In order to reduce unemployment, a govt moves one of its departments to a different part of a
country, even though it is expensive. Which type of unemployment is most likely to be reduce

A-cyclical
B-frictional
C-regional
D-seasonal
4. What is likely to lead to decrease in structural unemployment

A. reducing the interest rate

B. increasing the rate of unemployment benefit
C. reducing the rate of income tax
D. increasing labour mobility

5. As a result of a decrease in the demand for coal, several coal mines were closed. What type of
unemployment would this cause?

A. Cyclical
B. Frictional
C. Seasonal
D. structural

Chapter 31 Inflation and deflation

1. A person receives annual interest of 4 % on their savings. Inflation is 5 % per annum.

What is the change in the real value of their savings?
A. It falls 1 %.
B. It rises 4 %.
C. It falls 5 %.
D. It rises 9 %.

2. The table gives information on Gross Domestic Product (GDP) growth rates, inflation and the
unemployment rates for a number of countries in 2006.

What can be concluded from the table about 2006?

A. Any particular product would cost most in India.

B. Economic growth was highest when unemployment was lowest.
 C. Low inflation always causes low unemployment.
D. On average, the Chinese people were likely to have had an increase in real income.

3. 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.

Chapter 32 Living standards

1. 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.
2. The table shows the Gross Domestic Product (GDP) and population of four countries.
Which country is likely to have the lowest standard of living? Ans:- B

3. Why is the Human Development Index (HDI) a better indicator of comparative living
standards than Gross Domestic Product (GDP) per head?
A. It includes international trade.
B. It includes more measures of living standards.
C. It is measured in money terms.
D. It is more directly linked to economic growth.

4. The table gives information on standards of living in four countries.

On
On the basis of this information, which country has the highest standard of living?

A. Brazil
B. India
C. Rwanda
D. Uganda
Chapter 35 Differences in economic development between countries

1. 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

2. The table gives certain information about the population of three countries in 1995.

Which conclusion can be drawn about the countries in the table in 1995?

A. China had the highest percentage of children who died in infancy.

B. People in Hong Kong lived the longest.
C. Singapore had the largest number of people aged over 16.
D. The population of Singapore was expected to fall in the next five years.

3. 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? Ans :- C
Chapter 37:- Free trade & Protection
1. A 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

2. Many people in Zimbabwe want to buy foreign cars, which would be shipped by foreign
Companies. What happens if the Zimbabwe government removes the quota on the import of
motor cars? Ans:- D

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Chapter 38:- Foreign exchange rate
1. The exchange rate of the Jamaican $ changed from US$ 4 to US$ 5. What is a possible
reason for this change?
A. Fewer exports from Jamaica were being bought in the USA.
B. Less investment was made in Jamaica by US firms.
C. More imports from the USA were bought in Jamaica.
D. More tourists from the USA visited Jamaica.

2. The table shows the number of Jamaican dollars (J$) which are exchanged for one unit of
other currencies in June and July

2001.
Against which currency did the Jamaican dollar depreciate?

A. US $
B. UK £
C. Guyana $
D. Barbados $

3. The pound sterling made a dramatic recovery in the world's currency markets yesterday.’
To what does this statement refer?
A. exchange rate
B. growth rate
C. interest rate
D. tax rate

4. What would contribute to a fall in the value of the UK pound (£)?

A- a fall in interest rates in other countries
B- a rise in the number of foreign tourists visiting the UK
C- the removal of import tariffs by the USA
D- the value of UK imports increasing more than the value of UK exports
Chapter 39:- Current account of balance

1. 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.

2. A country has a surplus on its trade in goods and services of $20 m and a deficit on its current
account of $10 m. What position on its current income balance and current transfer balance is
consistent with this? Ans:- C

3. What might cause the balance on the current account of Mauritius to improve?
A. increased purchases of coffee from Kenya
B. increased transport of Mauritian goods in Portuguese ships
C. increased spending by Mauritians on holidays in Goa
D. increased spending by tourists in Mauritian hotels