Cambridge International (CAIE) AS Paper 1, March 2023

1. Aexcludable and non-rival.
2. Bexcludable and rival.
3. Cnon-excludable and non-rival.
4. Dnon-excludable and rival.

TopicClassification of goods and services

1. Athe time period when all factors of production are specialised
2. Bthe time period when all factors of production are variable
3. Cthe time period when all key inputs into production are variable
4. Dthe time period when at least one factor of production is fixed

TopicEconomic methodology

1. Aa depreciation of an exchange rate will cause the balance of payments to improve: normative; a rise in the minimum wage rate will cause unemployment to rise: normative
2. Ba depreciation of an exchange rate will cause the balance of payments to improve: normative; a rise in the minimum wage rate will cause unemployment to rise: positive
3. Ca depreciation of an exchange rate will cause the balance of payments to improve: positive; a rise in the minimum wage rate will cause unemployment to rise: normative
4. Da depreciation of an exchange rate will cause the balance of payments to improve: positive; a rise in the minimum wage rate will cause unemployment to rise: positive

TopicEconomic methodology4.5 Unemployment6.3 Current account of the balance of payments

1. AAs the price of corn falls, more of it is demanded.
2. BResources used in producing corn are more efficient than in producing wheat.
3. CThe opportunity cost of producing corn falls when moving from M to N.
4. DThe opportunity cost of producing corn is constant when moving from M to N.

TopicProduction possibility curves1.1 Scarcity, choice and opportunity cost

1. A$1 to $2
2. B$1 to $3
3. C$1 to $4
4. D$1 to $5

TopicDemand and supply curves

TopicPrice elasticity of supply

1. Ain the distribution of foodstuff among the population
2. Bin the hiring of workers by employers
3. Cin the ownership of land for agricultural use
4. Din the provision of public goods by the government

TopicResource allocation in different economic systems

1. Acheaper seats: elastic; more expensive seats: elastic
2. Bcheaper seats: elastic; more expensive seats: inelastic
3. Ccheaper seats: inelastic; more expensive seats: elastic
4. Dcheaper seats: inelastic; more expensive seats: unitary elasticity

TopicPrice elasticity, income elasticity and cross elasticity of demand

1. AIt shows an inverse relationship between income and quantity demanded.
2. BIt shows an inverse relationship between the price of the good and quantity demanded.
3. CIt shows a positive relationship between the price of the good and quantity demanded.
4. DIt shows a positive relationship between income and quantity demanded.

TopicDemand and supply curves2.2 Price elasticity, income elasticity and cross elasticity of demand

1. AThe choices people make are not dependent on income inequalities.
2. BConsumers pay the same prices for goods and services to satisfy their wants.
3. CHuman wants exceed what can be produced from available resources.
4. DNatural resources are unevenly distributed amongst nations.

TopicScarcity, choice and opportunity cost

1. Asupply of butter: move left along supply curve; supply of buttermilk: move left along supply curve
2. Bsupply of butter: move left along supply curve; supply of buttermilk: shift left of the supply curve
3. Csupply of butter: shift left of the supply curve; supply of buttermilk: move left along supply curve
4. Dsupply of butter: shift left of the supply curve; supply of buttermilk: shift left of the supply curve

TopicDemand and supply curves

1. Ax
2. By
3. Cx+y
4. Dx–y

TopicConsumer and producer surplus

1. AConsumers are afraid of having car accidents.
2. BConsumers are unable to afford bicycles.
3. CConsumers are not aware of the external benefits of using bicycles.
4. DConsumers ignore the external costs of using bicycles.

TopicReasons for government intervention in markets

1. AGini coefficients are not comparable between income and wealth because one is a flow concept and the other is a stock concept.
2. BIncome inequality is greater in country P than in country Q.
3. CWealth inequality is greater in country P than in country Q.
4. DWealth inequality is greater than income inequality in both countries.

TopicAddressing income and wealth inequality

1. Aan increase in laws to promote competition
2. Ban increase in taxation
3. Can increase in the budget surplus
4. Dan increase in the exchange rate

TopicPrice stability

1. A$19 billion
2. B$25 billion
3. C$31 billion
4. D$33 billion

TopicNational income statistics

1. AThe £ appreciated against the US$ and depreciated against the €.
2. BThe £ appreciated against the US$ and the €.
3. CThe £ depreciated against the US$ and appreciated against the €.
4. DThe £ depreciated against the US$ and the €.

TopicExchange rates

1. AExports and imports do not affect the equilibrium level of national income because they always cancel each other out.
2. BThe greater the level of saving, the greater the level of injections in the form of investment must be.
3. CWhen consumers use past savings to increase their spending, there will be a rise in national income.
4. DWhen a government increases withdrawals by increasing the rate of income tax, there must be an equivalent increase in injections to compensate.

TopicIntroduction to the circular flow of income

1. AIt fell in only one year.
2. BIt fell in only two years.
3. CIt rose in only two years.
4. DIt was constant in only one year.

TopicPrice stability

1. Acost-push inflation: no; rise in real incomes: no
2. Bcost-push inflation: no; rise in real incomes: yes
3. Ccost-push inflation: yes; rise in real incomes: no
4. Dcost-push inflation: yes; rise in real incomes: yes

TopicPrice stability4.1 National income statistics

TopicAggregate demand and aggregate supply analysis6.4 Exchange rates

1. Aa fall in its direct taxes
2. Ba fall in its export orders
3. Ca rise in its interest rates
4. Da rise in its imports

TopicExchange rates

1. AThe US government reduces subsidies on exports to the EU.
2. BForeign currency speculators in Switzerland believe that the US$ is undervalued and act accordingly.
3. CThe US government intervenes in the foreign exchange market so as to bring about a drop in the value of the US$.
4. DUS pharmaceutical companies experience a fall in demand for their products from the rest of

TopicExchange rates

1. Aits balance of payments performance
2. Bthe purchasing power of its exports
3. Cthe standard of living within the country
4. Dthe value of its real exchange rate

TopicThe reasons for international trade

1. Adomestic workers’ wages: unchanged; foreign consumers’ wages: fall
2. Bdomestic workers’ wages: fall; foreign consumers’ wages: unchanged
3. Cdomestic workers’ wages: fall; foreign consumers’ wages: fall
4. Ddomestic workers’ wages: rise; foreign consumers’ wages: rise

TopicThe interaction of demand and supply

1. Aunemployment level: high; price level: stable
2. Bunemployment level: high; price level: rising
3. Cunemployment level: low; price level: stable
4. Dunemployment level: low; price level: rising

TopicSupply-side policy

1. AIt allows the government more independence in policy making.
2. BIt encourages the government to build up its foreign exchange reserves.
3. CIt eliminates the instability of free markets.
4. DIt gives firms more confidence in future costs and prices.

TopicExchange rates

1. Aaggregate demand
2. Bbudget surplus
3. Cnominal income
4. Dinflation

TopicFiscal policy

1. Arate of inflation: cannot tell; rate of economic growth: positive
2. Brate of inflation: declining; rate of economic growth: cannot tell
3. Crate of inflation: positive; rate of economic growth: declining
4. Drate of inflation: rising; rate of economic growth: negative

TopicGovernment macroeconomic policy objectives4.6 Price stability

1. Aa fall in domestic growth
2. Bconsumer pessimism
3. Cincreased domestic saving
4. Dprice-elastic demand for exports

TopicPolicies to correct imbalances in the current account5.3 Monetary policy