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IGCSE (Cambridge) Microeconomics MCQs - 2019-2020 Flashcards | StudBud
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IGCSE (Cambridge) Microeconomics MCQs - 2019-2020
IGCSE (Cambridge) Microeconomics MCQs - 2019-2020
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Questions
30
Answers
1
The following information refers to a firm producing shoes. At which level of output does the firm maximise profits?
B
D
A
C
2
Which combination of a factor of production and its factor income is
not
correct?
D - land, rent
B - enterprise, profit
A - capital, interest
C - labour, dividends
3
How is a government most likely to prevent the growth of monopolies?
by promoting the benefits of economies of scale
by reducing barriers to entry into an industry
by encouraging mergers in the private sector
by establishing nationalised industries
4
People’s income decreases. How is the proportion spent on food and leisure likely to change?
Food - increase; Leisure - decrease
Food - decrease; Leisure - decrease
Food - increase; Leisure - increase
Food - decrease; Leisure - increase
5
What causes economic agents to make choices?
the existence of finite resources
the existence of free goods
the market mechanism
limited needs and wants
6
What would
most
likely cause a person to increase their savings?
a fall in interest rates
a reduction in tax-free saving schemes
a decision to plan for retirement
a fall in income
7
Firm X supplies bricks and decides to merge with firm Y that also supplies bricks. Which form of merger has taken place?
horizontal
conglomerate
forward vertical
backward vertical
8
Profit
$1000
$2000
$1650
$650
9
Price elasticity of demand (PED)
elastic
unit elastic
inelastic
perfectly elastic
10
Cuba is implementing free market reforms. What is a likely advantage of this?
increased provision of public goods
greater equality between the different groups in society
a wider variety of goods and services produced
less consumption of goods with external costs
11
Market failure
D
C
A
B
12
Price elasticity of supply (PES)
1.4
0.75
2.0
0.5
13
Who owns a public sector organisation?
specialist managers
the government
individuals
shareholders
14
What is the definition of diseconomies of scale?
the increase in average total costs as output increases
the decrease in fixed cost as output increases
the increase in total costs as output increases
the decrease in average revenue as output increases
15
Factors of production
labour
land
capital
enterprise
16
Which statement proves there has been an increase in productivity for a factory making tractors?
Night shifts lead to an increase in production of 10 tractors a day
Output per worker increases from 3 tractors to 4 tractors per month.
10% more workers results in a 10% increase in tractors produced each week.
Production increases as more workers are hired.
17
Production possibility curve (PPC)
New economic resources have been discovered in the country.
The government has encouraged long-term economic growth.
The government has brought about an increase in living standards.
Firms have decided to increase investment in technology.
18
Into which area of the diagram would the market equilibrium for product X move?
D
B
A
C
19
The diagram shows the fixed, variable and total costs of a firm. Which distance represents the firm’s fixed costs?
XZ
WX
WY
XZ
20
Why is the energy supply industry dominated by very large firms in many economies?
Non-price advertising increases competition.
Labour-intensive production techniques are used.
Government controls prevent the exploitation of consumers.
High fixed capital costs exist.
21
Production possibilities curve (PPC)
D
C
A
B
22
What will occur when there is a conglomerate merger?
reduced marketing economies of scale
reduced technical economies of scale
increased control over supply of raw materials
increased risk-bearing economies of scale
23
Why might a market economy fail to achieve the best use of scarce resources?
Consumers may lack information about which good to buy.
Public goods are overconsumed.
Demerit goods are underconsumed.
Most resources are owned by the government.
24
What might cause a rise in wages?
an increase in the size of the labour force
improved fringe benefits for workers
the introduction of a national minimum wage
a more elastic supply of labour
25
The price of bread rose by 5% and the quantity demanded fell by 4%. What was the price elasticity of demand for bread?
-0.4
-1.25
-0.8
-2.0
26
Why does specialisation increase the productivity of employees?
Time is saved by not moving between tasks.
Average cost of production increases.
Workers lose interest in their job.
Staff turnover is high.
27
Trade unions
The demand for the industry’s product is increasing.
The union workers have low-level skills.
The workers’ wages are the largest cost of the industry.
The industry consists of a small number of well-organised employers.
28
What is a disadvantage to employers of switching to production using division of labour?
training time decreases
repetition of tasks saves time
flexibility of workers is lost
average cost decreases
29
Market equilibrium
C
B
A
D
30
Microeconomics analyses choices in various situations. Which area of economic study does it not include?
individual consumer behaviour
costs and revenues of a firm
wages for different occupations
policies for economic growth
