Cambridge International (CAIE) AS Paper 1, June 2024

1. Aa lower ratio of capital to consumer goods is necessary to achieve economic growth
2. Bincreasing levels of unemployment
3. Cinsufficient factors of production are available
4. Dtoo many consumer goods are causing a fall in economic growth

TopicProduction possibility curves

1. Ademerit goods
2. Bfree goods
3. Cprivate goods
4. Dpublic goods

TopicResource allocation in different economic systems

1. AThe estimated cost of improving satellite observations is $1 billion a year.
2. BThe information received from the satellites is non-rival.
3. CThe satellites are designed to acquire the best possible information on climate change.
4. DThe responsibility for the cost of Earth observation satellites should be shared by all

TopicEconomic methodology

1. Aincreased number of hospital patients
2. Bincreased use of personal protective equipment
3. Cincreased stress for staff working in hospitals
4. Dincreased waiting times to treat non-virus patients

TopicScarcity, choice and opportunity cost

1. AInterest rates are set by government.
2. BProfit is what is left after interest, rent and wages are subtracted from total income.
3. CRent is only the return to the factor and so is always the smallest.
4. DWages only change annually.

TopicFactors of production

1. Ademand for gasoline: decreased; supply of gasoline: decreased
2. Bdemand for gasoline: decreased; supply of gasoline: increased
3. Cdemand for gasoline: increased; supply of gasoline: decreased
4. Ddemand for gasoline: increased; supply of gasoline: increased

TopicThe interaction of demand and supply

1. Aprice elasticity of supply: more elastic; producer surplus: decreases
2. Bprice elasticity of supply: more elastic; producer surplus: increases
3. Cprice elasticity of supply: unchanged; producer surplus: decreases
4. Dprice elasticity of supply: unchanged; producer surplus: increases

TopicPrice elasticity of supply2.5 Consumer and producer surplus2.2 Price elasticity, income elasticity and cross elasticity of demand

1. Awhen price is low and income is high
2. Bwhen price is high and income is low
3. Cwhen price and income are both high
4. Dwhen price and income are both low

TopicPrice elasticity, income elasticity and cross elasticity of demand

1. Aa fall in the price of dried fruit
2. Ba rise in real income
3. Ca rise in unemployment
4. Da successful advertising campaign by dried fruit producers

TopicPrice elasticity, income elasticity and cross elasticity of demand2.1 Demand and supply curves

1. AP1P2ST
2. BP2RS
3. CORSQ2
4. DOP2SQ2

TopicConsumer and producer surplus2.4 The interaction of demand and supply

1. Aa fall in its price
2. Ba fall in the price of connecting to a network
3. Ca fall in the price of parts used to make smartphones
4. Da rise in the price of a substitute

TopicDemand and supply curves

1. Amaximum price
2. Bminimum price
3. Csubsidy
4. Dunit tax

TopicMethods and effects of government intervention in markets

1. Aa new road linking a major city with a port
2. Bfree lunches provided to students at a school
3. CWi-Fi (internet access) provided for all the citizens of a town
4. Dstate provision of a national defence system

TopicClassification of goods and services

1. A$1600
2. B$2400
3. C$3200
4. D$4000

TopicMethods and effects of government intervention in markets

1. Araising indirect taxation
2. Breducing the budget surplus
3. Cremoving domestic subsidies
4. Dremoving import quotas

TopicAggregate demand and aggregate supply analysis

1. ANominal income doubled.
2. BReal income doubled.
3. CThe cost of living doubled.
4. DThe standard of living doubled.

TopicPrice stability

1. Aa fall in the rate of income tax
2. Ba rise in the rate of income tax
3. Ca depreciation of the exchange rate
4. Dan appreciation of the exchange rate

TopicPrice stability6.4 Exchange rates

1. Aan increase in students entering university
2. Ban increase in the birth rate
3. Can increase in the immigration of skilled labour
4. Dan increase in the school leaving age

TopicEconomic growth4.5 Unemployment

1. Aforeign investment in the domestic automobile industry
2. Brevenues received from exporting capital goods
3. Crevenues received from exporting consumer goods
4. Dsalaries remitted by those working abroad to their home accounts

TopicNational income statistics

1. AEconomic growth ensures a more even distribution of income.
2. BIncreasing output ensures that more workers are employed.
3. CChoosing between macroeconomic objectives requires a normative decision.
4. DA stable rate of inflation means zero inflation is required.

TopicGovernment macroeconomic policy objectives4.6 Price stability

TopicMonetary policy

1. Aincreasing interest rates for commercial banks
2. Bincreasing the interest rate on the national debt
3. Crestricting bank credit for consumer durables
4. Dincreasing the issue of notes and coins in circulation

TopicMonetary policy

1. Ademand-pull inflation and a balance of payments current account deficit
2. Bdemand-pull inflation and a low level of investment
3. Chigh unemployment and a balance of payments current account deficit
4. Dhigh unemployment and a low level of investment

TopicGovernment macroeconomic policy objectives6.3 Current account of the balance of payments5.3 Monetary policy

1. Aan increase in interest rates
2. Ban increase in the exchange rate
3. Ca reduction in direct taxes
4. Da reduction in subsidies to domestic industry

TopicPolicies to correct imbalances in the current account

1. Aa ban on the import of textiles
2. Ba sales tax on all textiles sold in the country
3. Ca tariff on the import of textiles
4. Dall textiles sold in the country are required to meet minimum quality standards

TopicProtectionism3.2 Methods and effects of government intervention in markets

1. Aan increase in the value of imported medical supplies
2. Ban increase in investment dividends paid to foreigners
3. Ca reduction in the value of exported manufactured goods
4. Da reduction in the expenditure by visiting tourists

TopicCurrent account of the balance of payments

1. ACountry X has an absolute advantage in the production of cotton.
2. BCountry X has a comparative advantage in the production of butter.
3. CCountry Y has a comparative advantage in the production of both goods.
4. DThere are no gains from trade between these two countries.

TopicThe reasons for international trade

1. Athe degree of its dependence on imports
2. Bthe international competitiveness of its exports
3. Cthe purchasing power of its exports relative to its imports
4. Dthe relative strength of its currency in the foreign exchange market

TopicThe reasons for international trade6.4 Exchange rates

1. Adividends paid from US firms to foreign shareholders
2. Bforeign firms buying US firms
3. Cforeigners who live in the US sending money home to their relatives
4. Dthe US government wanting to hold reserves of foreign currency

TopicExchange rates2.1 Demand and supply curves

1. Ainternational aid
2. Btrade in goods
3. Ctrade in services
4. Dforeign direct investment

TopicCurrent account of the balance of payments