VIBGYOR HIGH

SAMPLE PAPER

GRADE: 9 IGCSE Max. Marks: 90

SUBJECT: ECONOMICS (0455) Date:

Paper No 2: Structured Questions Time: 2 hr 15 min

Name of Candidate:

Candidate No: Centre No:

You must answer on the enclosed answer booklet.

You will need: Answer booklet (enclosed)
INSTRUCTIONS
Answer four questions in total:
Section A: answer Question 1.
Section B: answer three questions.
Follow the instructions on the front cover of the answer booklet. If you need additional answer paper,
ask the invigilator for a continuation booklet.
You may use a calculator.
INFORMATION
The total mark for this paper is 90.
The number of marks for each question or part question is shown in brackets [ ].

For Examiner’s Use

Total marks obtained in P2

Teacher’s signature

This document consists of 5 printed pages and 1 blank page.

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 Section A
Answer this question.

1. Driverless cars and advances in technology

It is predicted that driverless cars, powered by electricity, will be on the roads by 2030.
Driverless cars have already been tried out on the roads in some cities, including Pittsburgh
in the USA. It is thought that driverless cars will reduce accidents, will have lower repair
costs and will create less pollution.

At first, the supply of driverless cars may exceed the demand, but it is expected that they
will soon grow in popularity. As more driverless cars come into use, the demand for bus
travel and petrol stations may decline, and some taxi drivers may be made redundant. In
contrast, the increased access to transport that driverless cars will give to people, including
the elderly, is likely to increase demand for out of town restaurants and places of
entertainment.

It has been forecast that the technology being developed in connection with driverless cars
will make the supply of them elastic. It is predicted that an 8% rise in the price of driverless
cars would cause a 20% rise in the quantity supplied.

Advances in technology and the replacement of workers by machines are forecast to

destroy 80 million jobs in the USA. Job losses are also forecast in other countries and trade
unions are likely to be less able to resist these due to a fall in membership and
governments reducing the power of trade unions. Among the jobs thought to be at risk are
accountants, train drivers and financial advisers. Demand for workers in other occupations,
including doctors and dentists, may increase but there is a risk that unemployment may
rise. The more educated workers are, the more easily they can move from one occupation
to another. Table 1.1 shows education spending as a percentage (%) of GDP and the
unemployment rate in selected countries.

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 Table 1.1

Education spending and the unemployment rate in selected countries

Jobs selling houses and flats may decline but it is expected that the demand for building
workers may increase. Some people welcome house building in their area but others
oppose it. [30]
1 (a) Identify, from the extract, two pairs of substitutes. [2]
(b) Explain, using information from the extract, whether the market for driverless cars is
expected to be in equilibrium in 2030. [2]
(c) Calculate, using information from the extract, the price elasticity of supply (PES) of
driverless cars. [2]
(d) Explain, using information from the extract, two external costs that driverless cars could
reduce. [4]
(e) Analyse, using a demand and supply diagram, the effect of an increase in demand for
cars on the market for tyres. [5]
(f) Discuss whether or not an increase in house building will benefit the people who live in
the area. [5]
(g) Explain, using information from the extract, two reasons why the power of trade unions
may decline in the future. [4]
(h) Discuss whether demand for driverless cars is likely to increase in the future. [6]

Section B
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 Answer any three questions from this section.
[20]
2 Indonesia’s output is influenced by its factors of production. A production possibility curve
diagram can be used to show this relationship between resources and output. Indonesia
does have extensive fishing waters but does not actually catch many fish. Most of its fishing
firms are small and they compete against much larger foreign firms. These larger foreign
firms have been attracted into Indonesia’s waters because of increasing demand for fish.
The price elasticity of demand for different types of fish has changed in the last few years.

(a) Identify the two human factors of production. [2]

(b) Explain two economic concepts shown by a production possibility curve diagram. [4]
(c) Analyse why demand for a product may become more elastic over time. [6]
(d) Discuss whether small firms can compete successfully against large firms. [8]

[20]
3 In the Netherlands in 2018, there were 1.3 bicycles per person and the world’s largest
underground bicycle parking area was built in the capital city. Land is scarce in city
centres, where most cycling takes place. Demand for bikes in the Netherlands is price-
inelastic. Only a few people in the Netherlands borrow money to buy bikes. The
government encourages cycling by spending on both bike parking areas and leisure cycle
parks.

(a) Identify one difference between land and labour. [2]

(b) Explain two reasons why demand for a product may be price-inelastic. [4]
(c) Analyse why households in one country may borrow more than households in another
country. [6]
(d) Discuss whether or not a government should encourage more people to cycle. [8]

[20]

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4 The money supply in Bangladesh increased every year from 2010 to 2018. Changes in
the money supply and the foreign exchange rate can affect a government’s
macroeconomic
policy aims, including full employment. There have been few mergers between
commercial banks in Bangladesh, although its banks are larger than many of its other
firms.
(a) Identify two functions of money. [2]
(b) Explain two reasons why commercial banks may want to merge. [4]
(c) Explain the likely impact of trade unions on the welfare of their members. [6]
(d) Discuss whether or not it is an advantage to keep a firm small. [8]

[20]
5 More agricultural markets come close to perfect competition than markets for
manufactured goods and for services. The goals of business organisations can vary
between markets, and within markets. In 2017, the Nigerian government used supply-
side policy measures to influence the goals and performance of firms in a range of
markets and to lower firms’ average costs of production.
(a) Identify two characteristics of perfect competition. [2]
(b) Explain two goals a business organisation may have. [4]
(c) Analyse the main reasons for the differences in the size of firms. [6]
(d) Discuss whether or not all governments will have the same economic aims. [8]

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