Cambridge International (CAIE) AS Paper 1, November 2024

1. Athe consumers’ preferred combination of output
2. Bthe level of economic growth
3. Cthe opportunity cost of manufactured goods in terms of agricultural products
4. Dthe preference for present consumption rather than future consumption

TopicProduction possibility curves

1. AAn increase in output per worker in the long run depends on an increase in pay.
2. BAn increase in output per worker requires more capital.
3. CSpecialisation means workers lose skills.
4. DWorkers get bored if they are repeating the same work.

TopicFactors of production6.1 The reasons for international trade4.1 National income statistics

1. Alabour, land, capital and enterprise
2. Blabour, land and capital only
3. Centerprise and land only
4. Denterprise only

TopicFactors of production

1. AAll taxes should be proportional to income.
2. BA progressive tax is a fair tax.
3. CGreater equality of income is desirable.
4. DIncome inequality is decreasing.

TopicEconomic methodology

1. Athe price of private goods
2. Bthe price of public goods
3. Cthe opportunity cost of private goods
4. Dthe opportunity cost of public goods

TopicProduction possibility curves1.6 Classification of goods and services4.3 Aggregate demand and aggregate supply analysis

1. Aan increase in the number of firms in the industry
2. Ban increase in the number of workers employed
3. Can increase in the productivity of the workforce
4. Dan increase in the wage rates paid to workers

TopicDemand and supply curves

1. Anature of the labour employed by the firm: skilled; level of unemployment in the economy: high
2. Bnature of the labour employed by the firm: skilled; level of unemployment in the economy: low
3. Cnature of the labour employed by the firm: unskilled; level of unemployment in the economy: high
4. Dnature of the labour employed by the firm: unskilled; level of unemployment in the economy: low

TopicPrice elasticity of supply2.2 Price elasticity, income elasticity and cross elasticity of demand

1. Aa rise in consumers’ incomes
2. Ba rise in income tax
3. Ca rise in sales tax
4. Da rise in the price of a complement

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

TopicPrice elasticity of supply2.2 Price elasticity, income elasticity and cross elasticity of demand

1. Aconsumer surplus: decreases by s; producer surplus: increases by s + u – t
2. Bconsumer surplus: decreases by s; producer surplus: increases by u + v – w
3. Cconsumer surplus: decreases by s + t; producer surplus: increases by s + t – v
4. Dconsumer surplus: decreases by s + t; producer surplus: increases by s + z – v

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

1. AProducers of good X adopt new technology.
2. BProducers of good X receive a subsidy.
3. CSome firms stop production of good X.
4. DThe tax on the production of good X is cut.

TopicThe interaction of demand and supply

1. AWZ
2. BXY
3. CXZ
4. DYZ

TopicMethods and effects of government intervention in markets

1. Aan increase in indirect taxation
2. Ban increase in the value of property
3. Ca reduction in the minimum wage
4. Da reduction in the rate of interest paid on savings

TopicAddressing income and wealth inequality

1. A$15
2. B$85
3. C$100
4. D$150

TopicMethods and effects of government intervention in markets2.3 Price elasticity of supply5.2 Fiscal policy

1. A$18 182
2. B$22 727
3. C$25 000
4. D$27 500

TopicPrice stability

1. Acyclical
2. Bfrictional
3. Cseasonal
4. Dstructural

TopicUnemployment

1. Aa fall in income equality
2. Ba fall in incomes abroad
3. Ca fall in the exchange rate
4. Da fall in the government budget deficit

TopicAggregate demand and aggregate supply analysis2.1 Demand and supply curves

1. Acapital consumption and net property income from abroad
2. Bexpenditure taxes and capital consumption
3. Cnet property income from abroad and subsidies
4. Dsubsidies and expenditure taxes

TopicNational income statistics

1. AMenu costs will fall to zero.
2. BPeople on fixed incomes will be better off in real terms.
3. CSavers will gain in real terms.
4. DThe purchasing power of the currency will rise.

TopicPrice stability5.3 Monetary policy

1. Aencourage the consumption of merit goods
2. Breduce pollution in the steel industry
3. Cmaintain general price stability
4. Dreduce unemployment in the service sector

TopicGovernment macroeconomic policy objectives4.6 Price stability1.6 Classification of goods and services

1. Aincreased spending on early years education
2. Bincreased spending on infrastructure
3. Creduced import barriers
4. Dsubsidies to exporters

TopicSupply-side policy

TopicAggregate demand and aggregate supply analysis

1. Anet inward immigration
2. Ban increase in the level of unemployment benefits
3. Can increase in the age at which state pensions are payable
4. Dan increase in the number of university students

TopicUnemployment

1. AIt sells mainly abroad and relies on domestic suppliers for inputs.
2. BIt sells mainly abroad and relies on foreign suppliers for inputs.
3. CIt sells mainly in its home market and relies on domestic suppliers for inputs.
4. DIt sells mainly in its home market and relies on foreign suppliers for inputs.

TopicExchange rates

1. Aeconomic growth rate
2. Bexchange rate
3. Cinterest rate
4. Dunemployment rate

TopicCurrent account of the balance of payments6.4 Exchange rates

1. Adecreased import quotas
2. Bdepreciation of currency
3. Chigher interest rates
4. Ddecreased import tariffs

TopicPolicies to correct imbalances in the current account6.3 Current account of the balance of payments6.2 Protectionism

1. Athe average price of exports: falls by 5%; the average price of imports: rises by 5%
2. Bthe average price of exports: remains unchanged; the average price of imports: rises by 10%
3. Cthe average price of exports: rises by 5%; the average price of imports: falls by 5%
4. Dthe average price of exports: rises by 10%; the average price of imports: remains unchanged

TopicThe reasons for international trade

1. Athe European Union (EU) requiring goods imported into member states to meet safety standards
2. Bthe Pakistan government increasing the rate of goods and services tax (GST) on some exported goods from 2% to 5%
3. Cthe Nigeria government banning the import of packaged sugar
4. Dthe US imposing a 35% tariff on tyres imported from China

TopicProtectionism

1. A–$223 million
2. B–$217 million
3. C+$208 million
4. D+$247 million

TopicCurrent account of the balance of payments

1. A2019: 6.91; 2020: 6.90
2. B2019: 70.4; 2020: 74.1
3. C2019: 14.4; 2020: 16.5
4. D2019: 0.99; 2020: 0.94

TopicExchange rates