2

1 A natural resource was discovered in a country. The exploitation of this resource allowed the
country to double its gross domestic product within ten years.

Why did this not solve the basic economic problem?

A Exploiting the resource required high expenditure on capital equipment.

B Exploiting the resource caused significant environmental damage.
C Gross domestic product was unevenly distributed in the country.
D Wants still exceeded the resources available to meet those wants.

2 The diagram shows a shift in a country’s production possibility curve (PPC).

capital
goods

O
consumer
goods

What would cause the shift from X to Y?

A a fall in the unemployment rate

B a fall in consumer demand
C a rise in the rate of inflation
D a rise in the size of the labour force

3 A farmer decides to grow potatoes instead of wheat.

What is the opportunity cost of growing the potatoes?

A the output of wheat

B the price of seed potatoes
C the profit from growing potatoes
D the time spent preparing the potato field

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4 Which are both macroeconomic decisions?

decision 1 decision 2

A a school recruits more teachers a firm sets the prices for its products
B a central bank reduces money supply a government spends more on defence
C a government increases tax rates a farmer decides which crops to grow
D a household cuts its energy use a worker accepts an offer of overtime

5 What is the function of the price mechanism in a market economy?

A allocating resources and guiding choices

B allowing governments to provide price stability
C enabling markets to operate fairly
D preventing competitors from entering a market

6 The diagrams show changes in the market conditions for coffee.

Which diagram shows the effect of a poor harvest of coffee beans?

A B

price S2 price S1
S1 S2

D
D
O O
quantity quantity

C D

price price S
S

D2 D1
D1 D2

O O
quantity quantity

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 4

7 The price elasticity of supply of good X is 0.1. The good suddenly becomes very fashionable,
leading to a large increase in demand.

What would be the likely outcome of this change in the short term?

A a large increase in output

B a large increase in price
C a small increase in price
D a small increase in revenue

8 What is a disadvantage to employers of switching to production using division of labour?

A average cost decreases

B flexibility of workers is lost
C repetition of tasks saves time
D training time decreases

9 What is an advantage to a country of having an efficient commercial banking system?

A It controls the money supply.

B It discourages spending.
C It encourages tax evasion.
D It enables investment.

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10 The graph shows women’s wages as a percentage of men’s wages in year 1 and year 2.

85

percent 80

75 year 2
70

65
year 1
60

55

27 30 35 40 45 50 55 60 62

age

Which statement is shown by the graph to be true?

A Younger women earn more than older women.

B Women’s wages remain about the same between the ages of 40–50.
C In year 2, all women were earning more than men.
D In year 2, women were earning a higher percentage of men’s wages than in year 1.

11 People’s income decreases.

How is the proportion spent on food and leisure likely to change?

food leisure

A decrease decrease
B decrease increase
C increase decrease
D increase increase

12 A firm produces 1000 units and has a total cost of $50 000. The variable cost per unit produced is
$40.

What is the total fixed cost of the firm?

A $1000 B $4000 C $10 000 D $40 000

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 6

13 The following information refers to a firm producing shoes.

At which level of output does the firm maximise profits?

total output of total cost total revenue

pairs of shoes ($) ($)

A 100 1000 1300

B 200 1800 2200
C 300 2700 3000
D 400 3200 3400

14 Firms can grow by increasing the internal scale of their operations.

What might be a disadvantage of this to the firm?

A average cost begins to fall

B it is difficult to motivate workers
C labour is replaced by robots
D markets become global

15 A government owns and runs an airline.

Which combination of ownership and sector is this?

ownership sector

A private secondary
B private tertiary
C public secondary
D public tertiary

16 What is not included in public expenditure?

A capital spending by firms

B interest payments on government borrowing
C investment in defence by the central government
D subsidies to bus companies from local government

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17 When is the budget described as balanced?

A when direct taxes and indirect taxes are equal

B when exports and imports are equal
C when government spending and government revenue are equal
D when the demand for money and the supply of money are equal

18 What is the main aim of supply-side policy?

A increasing economic growth by raising productivity

B increasing the balance of payments surplus by restricting free trade
C reducing the government’s budget deficit by increasing taxation
D reducing the money supply by increasing the rate of interest

19 A government is not allowed to increase its military spending.

Government spending is currently at X.

Which diagram illustrates a possible change in government spending?

A B
Y
military military
spending Y spending X

O non-military O non-military
spending spending

C D
Y
military military
spending X spending X

O non-military O non-military
spending spending

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 8

20 A country has full employment.

Which policy is most likely to lead to a fall in economic growth in the short run but an increase in
economic growth in the long run?

A lowering the retirement age

B raising the school leaving age
C restricting the immigration of key workers
D selling assets owned in other countries

21 A government has a contractionary fiscal policy to reduce inflation. What will the government
increase?

A expenditure on infrastructure
B income tax rates
C personal tax allowances
D unemployment benefits

22 What would not be required in the construction of an index of consumer prices?

A the selection of a base year

B the selection of a representative range of items
C the calculation of average wage levels
D the weighting of each item in the index

23 The table gives information about three economic indicators in four countries.

rate of rate of rate of

inflation interest unemployment
% % %

country W 1.4 3.4 10.2

country X 3.7 8.7 12.3
country Y 3.6 7.3 14.2
country Z 2.1 6.0 7.7

What may be concluded from this information?

A Countries with higher inflation have higher interest rates.

B Countries with higher interest rates have lower unemployment.
C The country with the lowest inflation had the highest unemployment.
D The country with the lowest unemployment had the lowest inflation.

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24 Real incomes have risen in a country.

Which situation would definitely have caused this?

money
price level
incomes

A fell fell
B fell rose
C rose rose
D rose fell

25 In recent years some low-income countries have achieved higher rates of economic growth than
high-income countries.

What is most likely to explain this accelerated economic growth?

A ease of transfer of modern technology to increase productivity

B falling agricultural prices
C higher ratios of labour to capital in manufacturing industries
D increased trade barriers by high-income countries

26 Which changes usually result when a country develops and is able to provide free healthcare and
good living conditions?

labour
birth rate death rate
productivity

A falls falls rises

B falls rises falls
C rises falls falls
D rises rises rises

27 What are the effects on price and equilibrium quantity of the imposition of an import tariff on a
good?

price equilibrium quantity

A decreases decreases
B decreases increases
C increases decreases
D increases increases

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28 Which change will not increase a surplus on the current account of the balance of payments of a
country?

A a decrease in the value of imports

B a decrease in primary income outflows
C an increase in the amount of development aid received
D an increase in domestic inflation rates

29 An economy with a floating exchange rate experiences an increased deficit on the current
account of the balance of payments.

What will result from this?

A an increase in government debt

B an increase in its foreign currency reserves
C an increase in the demand for its currency on the foreign exchange market
D an increase in the supply of its currency on the foreign exchange market

30 The table shows components of Japan’s current account balance in trillion Yen (¥) for 2011 and
2012.

balance of balance of balance of

balance of goods
year services primary income secondary income
¥ trillion
¥ trillion ¥ trillion ¥ trillion

2011 –1.61 –1.76 14.04 –1.11

2012 –5.23 –2.33 13.55 –1.02

Which balance improved between 2011 and 2012?

A balance of goods
B balance of services
C balance of primary income
D balance of secondary income

© UCLES 2020 0455/13/M/J/20

0455/13 Cambridge IGCSE – Mark Scheme May/June 2020
PUBLISHED

Question Answer Marks

1 D 1

2 D 1

3 A 1

4 B 1

5 A 1

6 A 1

7 B 1

8 B 1

9 D 1

10 D 1

11 C 1

12 C 1

13 B 1

14 B 1

15 D 1

16 A 1

17 C 1

18 A 1

19 D 1

20 B 1

21 B 1

22 C 1

23 A 1

24 B 1

25 A 1

26 A 1

27 C 29 - D 1

28 D 30 - D 1

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 2

1 Increasing output of one good reduces production of another good.

Which economic concept does this change represent?

A average cost
B diseconomies of scale
C economies of scale
D opportunity cost

2 What condition in an economy would encourage immigration of labour?

A high cost of housing

B preference for domestic over foreign qualifications
C reduced quotas for foreign workers
D shortage of skilled workers

3 The production possibility curve (PPC) shows the hours per day that a person has for either work
or leisure.

R
15

work S
12
(hours)
T
9
U
6
V
3
W
0
0 3 6 9 12 15
leisure
(hours)

This person works 6 hours a day but then decides to work 9 hours a day.

Which movement shows this change?

A T to R B T to U C U to V D U to T

4 Who is a microeconomic decision maker?

A the director of an international trade organisation

B the entrepreneur of a firm
C the finance minister of a government
D the governor of a central bank
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 3

5 What is an essential feature of a market economy?

A Central planners determine what, how and for whom to produce.

B It aims for equality in the distribution of goods and services.
C The market price reflects both the private and external costs of production.
D The price mechanism sends signals to consumers and producers to allocate resources.

6 What is a definition of market failure?

A market forces of demand and supply do not allocate resources efficiently

B not all consumers can afford to buy the goods they would like
C private benefits of consumption are greater than external benefits
D public goods are only provided by a government

7 The diagram shows the market for oil. The original equilibrium is X. Oil producers discover a new
source of oil while there is economic growth.

What is the new equilibrium?

price

S2
B
A S1

X S3
C
D

D2 D1 D3
O
quantity

8 In response to an increase in price from $5 per kilo to $6 per kilo, a farmer increased supply from
400 kilos to 500 kilos per week.

What is the price elasticity of supply?

A 0.8 B 0.9 C 1.2 D 1.25

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 4

9 Average incomes rose by 5% but savings did not rise.

What might explain this?

A Consumer confidence in the economy fell.

B Incomes rose more slowly than the rate of inflation.
C Interest rates for savings rose.
D The rate of income tax was reduced.

10 Which firm is in the tertiary sector?

A bread bakery
B fruit grower
C meal delivery
D road builder

11 What is a benefit to a worker of being a member of a trade union?

A access to advice
B guaranteed employment
C opportunity to work extra hours
D payment of subscriptions

12 A firm employs 10 workers. Each worker is paid a weekly wage of $200 and produces 50 goods
per week.

What is the average cost of labour per good produced?

A $0.4 B $4 C $20 D $200

13 How would advertising a good result in a retail firm increasing its market share?

A It will improve the personal service in its shops.

B It will increase the firm’s costs.
C It will reduce demand for competitors’ products.
D It will result in diversification in the firm.

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14 What describes the total revenue of a firm?

A fixed costs plus variable costs

B income from sales minus total costs
C quantity of goods sold multiplied by unit price
D variable costs divided by output

15 The diagram shows the total revenue (TR) and total cost (TC) of a firm in a market.

At which level of output will the firm maximise profits?

TC
cost and
revenue

TR

O A B C D
output

16 What is fiscal policy?

A government decisions on money supply and interest rates taken to influence total demand
B government decisions on spending and taxation designed to influence total demand
C government measures designed to influence total supply in the economy
D government regulation of the foreign exchange rate to influence imports

17 What is the money supply?

A the total quantity of foreign currency available within the economy

B the total quantity of money available within the economy
C the total quantity of money issued by the central bank
D the total quantity of money within commercial banks

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 6

18 The table shows sources of government revenue for an economy.

sources of revenue $ billions

sale of government assets 100

sales tax 300
tariffs on imports 50
tax on employment income 500
tax on inherited wealth 50
tax on company profits 100

What is the total amount of tax revenue raised by direct taxes?

A $600 billion B $650 billion C $950 billion D $1100 billion

19 The table shows the Consumer Prices Index (CPI) of a country for five years.

year CPI

1 100
2 120
3 135
4 140
5 138

Which statement about the country is correct?

A It faced deflation in year 2.

B It faced deflation in year 3.
C It faced inflation in year 4.
D It faced inflation in year 5.

20 What may cause deflation?

A advances in technology and increases in labour productivity

B government using a policy of very low interest rates
C increases in the costs of production that reduce firms’ profits
D increases in the rate of inflation as measured by the CPI

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21 Economic growth can be defined as

A a reduction in a country’s rate of inflation.

B an increase in a country’s exports.
C an increase in a country’s population.
D an increase in a country’s productive capacity.

22 The table compares the distribution of employment in selected industries in two years.

employment in millions
industry
year 1 year 2

agriculture 4 3
mining 2 2
manufacturing 6 6
retailing 4 4
transport 4 5
total 20 20

How did the distribution of employment change between year 1 and year 2?

primary sector secondary sector

A fell rose
B fell unchanged
C rose fell
D rose unchanged

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23 In a year, two changes occurred in a company.

Company directors’ salaries increased by 15%.

Office workers’ wages increased by 5%.

The rate of inflation was 3.4%.

What happened to real income?

company directors’ office workers’

real income real income

A fell fell
B fell rose
C rose fell
D rose rose

24 The diagrams show birth rate (BR) and death rate (DR) in three countries, X, Y and Z, in two
years, 1 and 2.

There was no migration.

X Y Z

BR BR BR
and and and BR
DR DR DR DR

BR
DR
DR BR
1 2 1 2 1 2
year year year

Where was there a rise in population in year 1 and a fall in population in year 2?

A X and Z B X only C Y and Z D Y only

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25 The richest 60% of the population of a high-income economy received an increase in income.
The income of the rest of the population did not change.

What happened to absolute and relative poverty?

absolute poverty relative poverty

A increased increased
B increased remained constant
C remained constant increased
D remained constant remained constant

26 Gross Domestic Product (GDP) is a better measure of comparative living standards when it is
adjusted for the effects of

A exports and inflation.

B imports and exports.
C population change and exports.
D population change and inflation.

27 What is a benefit of a multinational company (MNC) to the host country?

A A MNC may improve the reputation of its home country as a high-quality producer.
B Exports by a MNC may result in an improved trade balance for the host country.
C Production by a MNC may lead to higher levels of pollution in the host country.
D Profits made by a MNC are sent back to its home country.

28 Globalisation is the process by which domestic firms become involved in international markets.

What encourages globalisation?

A controls on foreign exchange

B immigration restrictions
C increasing tariffs
D widespread use of the internet

29 What does a foreign exchange rate between Malaysia and the US measure?

A the cost of the Malaysian currency in the US currency

B the difference in the cost of living between Malaysia and the US
C the difference in the standard of living between Malaysia and the US
D GDP of Malaysia divided by the GDP of the US

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30 A country has a deficit on its current account of its balance of payments.

What could increase the size of its deficit?

A increased exports of its services

B increased international competitiveness of its goods
C increased numbers of visitors from abroad
D increased spending on its military bases abroad

© UCLES 2021 0455/13/M/J/21

0455/13 Cambridge IGCSE – Mark Scheme May/June 2021
PUBLISHED

Question Answer Marks

1 D 1

2 D 1

3 D 1

4 B 1

5 D 1

6 A 1

7 C 1

8 D 1

9 B 1

10 C 1

11 A 1

12 B 1

13 C 1

14 C 1

15 B 1

16 B 1

17 B 1

18 B 1

19 C 1

20 A 1

21 D 1

22 B 1

23 D 1

24 D 1

25 C 1

26 D 1

27 B 29 - A 1

28 D 30 - D 1

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 2

1 Which factor has the correct factor reward identified?

factor factor reward

A capital profit
B enterprise wages
C labour interest
D land rent

2 A student has nothing to do on a Friday evening. She withdraws $5 from the $100 she has in a
savings account and buys a present to take to a party, to which admission is free.

What does this involve?

A an opportunity cost equal to $95

B an opportunity cost equal to other goods she could have bought for $5
C no opportunity cost, as entrance to the party is free
D no opportunity cost, as she had no better way of using the time

3 What would cause a shift in a country’s production possibility curve?

A a fall in unemployment
B a recovery from a recession
C a rise in prices
D the destruction of factories in a war

4 Which topic is studied in macroeconomics?

A cost-push inflation
B market price determination
C public goods
D the output of a firm

5 China is moving towards a more mixed economic system and reducing the role of the public
sector.

Which economic policy measure might best achieve this?

A creating excess capacity in state-owned enterprises

B encouraging competition among private sector firms
C protecting infant industries
D subsidising transport infrastructure

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 3

6 The diagram shows the supply and demand for a product.

S
price $

0 10 000
quantity (units)

Suppliers have decided to produce 10 000 units and charge a price of $6.

What is the result of this decision in the short run?

A A stable equilibrium price will be achieved.

B Suppliers will be left with unsold stock.
C The equilibrium market price will increase.
D There will be excess demand at the price of $6.

7 Which statement about price elasticity of demand (PED) is correct?

A PED measures the percentage change in quantity demanded divided by the percentage
change in price.
B PED measures the change in price divided by the change in the quantity demanded.
C PED means a change in price will cause an equal change in the quantity demanded.
D PED means a change in demand will result in a greater percentage change in price.

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 4

8 A manufacturer of tinned beans mechanises its assembly line. This increases output by 30% and
reduces labour by 20%.

How and why will this affect supply curve S?

S
price of
tinned
beans

O quantity of
tinned beans

A S will move to the left due to an increase in average costs.

B S will move to the left due to an increase in the price of tinned beans.
C S will move to the right due to an increase in consumer demand.
D S will move to the right due to an increase in productivity.

9 The diagram shows the fixed costs, variable costs and total costs of a firm at output S.

costs
P

O S
output

Which distance represents the firm’s variable costs?

A PQ B PS C QR D QS

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 5

10 A cinema has 500 seats. It raised its admission price from $2 to $5 and daily revenue increased
from $800 to $1500.

What can be concluded from this information?

A Price elasticity of demand for cinema seats was elastic.

B Price elasticity of supply of cinema seats was elastic.
C The cinema operated below full capacity.
D The cinema’s profits rose by $700.

11 What is an outcome of a competitive market?

A high prices and low quality

B low prices and large choice
C high profits and low quality
D low profits and little choice

12 What might prevent an individual choosing a particular occupation?

A little opportunity for career progression

B low cost of travelling to work
C no risk to personal health
D wage rate above national minimum wage

13 What might encourage a consumer to spend less and save more?

A the expectation that prices will fall

B the expectation that prices will rise
C the expectation that unemployment will fall
D the expectation that real GDP will rise

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14 The table shows how three people, X, Y and Z, spend their income.

person X person Y person Z

food, clothing and housing 30% 25% 50%

entertainment and leisure 35% 35% 25%
luxury goods 35% 40% 25%

What is the likely order of income, from lowest income to highest income, for these three people?

A YXZ

B YZX

C ZXY

D ZYX

15 Which activity is correctly linked to the organisation that provides it?

organisation activity

A central bank regulate the rate of inflation

B central bank set direct tax rates
C commercial bank manage the government’s financial accounts
D commercial bank safeguard the country’s foreign reserves

16 What is not usually a macroeconomic aim?

A balance of payments stability

B high government borrowing
C lowering cyclical unemployment
D reducing absolute poverty

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17 A government decides to increase the indirect tax on petrol. Petrol has an inelastic price elasticity
of demand.

What are likely to be the consequences?

quantity of government
petrol bought revenue

A decreases decreases
B decreases increases
C increases decreases
D increases increases

18 In a country, there is an increase in the rate of interest to prevent inflation.

Which type of macroeconomic policy is this?

A fiscal policy
B monetary policy
C supply-side policy
D trade policy

19 A government significantly increases its spending on education and training over several years.

What will be the likely effect of this policy measure on the rate of inflation in both the short run
and the long run?

short-run effect long-run effect

A decreases decreases
B decreases increases
C increases decreases
D increases increases

20 What may cause a recession?

A an increase in consumer spending

B an increase in government spending
C an increase in imports
D an increase in investment

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21 Why might the macroeconomic aim of full employment conflict with the aim of stable prices?

A Full employment leads to higher cost of imports.

B Full employment leads to increased income inequality.
C Full employment leads to increases in wages.
D Full employment leads to lower exports.

22 In a country, inflation is 10% and nominal interest rates are 7%.

Which group is most likely to benefit from this situation?

A borrowers
B employers
C lenders
D savers

23 Which action is not performed by a government as part of its international role?

A building offshore wind farms

B imposing tariffs on imports
C issuing visas to foreign tourists
D providing humanitarian aid to refugees

24 Which components, in addition to Gross Domestic Product (GDP) per head, are included in the
Human Development Index (HDI)?

A average earnings and inequalities of incomes

B balance of trade and balance of payments
C life expectancy at birth and expected years of schooling
D size of population and age structure of population

25 What is likely to cause an immediate decrease in the size of the labour force?

A a fall in the average size of families

B a fall in the birth rate
C a reduction in the age of retirement
D an increase in net immigration

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26 The table shows some economic indicators.

Which increase in the first indicator is most likely to lead to an increase in the second indicator?

first indicator second indicator

A budget surplus consumer saving

B consumer spending unemployment
C inflation trade surplus
D productivity living standards

27 When are countries most likely to specialise and trade with each other?

A when the cost of transport between them is high

B when there are large differences in their resource allocations
C when they have access to the same technology
D when they have high tariffs and other protective measures

28 A government removed the quota on goods imported into the country.

What is the most likely result of this?

A a decrease in demand for domestic production

B a decrease in domestic unemployment
C a decrease in exports
D a decrease in the balance of trade deficit

29 A country has a surplus on the current account of its balance of payments.

What would be most likely to cause the country to move into deficit?

A devaluation of its fixed exchange rate

B government subsidies to its exporters
C improved technology in other countries
D productivity increases in its export industries

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 10

30 The governments of low-income countries often allow foreign multinational companies (MNCs) to
mine minerals in their country.

Which conflict between benefit and cost might this cause the low-income countries?

benefit cost

A improved balance of trade training by the MNCs

B higher employment loss of a finite resource
C increased profits for the MNCs efficient production
D more sustainable development economic growth

© UCLES 2022 0455/13/M/J/22

0455/13 Cambridge IGCSE – Mark Scheme May/June 2022
PUBLISHED

Question Answer Marks

1 D 1

2 B 1

3 D 1

4 A 1

5 B 1

6 B 1

7 A 1

8 D 1

9 D 1

10 C 1

11 B 1

12 A 1

13 A 1

14 C 1

15 A 1

16 B 1

17 B 1

18 B 1

19 C 1

20 C 1

21 C 1

22 A 1

23 A 1

24 C 1

25 C 1

26 D 1

27 B 29 - C 1

28 A 30 - B 1

© UCLES 2022 Page 2 of 3

 2

1 How can the economic problem be described?

A as insufficient capital to satisfy our wants

B as insufficient income to satisfy all our needs
C as insufficient resources to satisfy our unlimited wants
D as insufficient wealth to satisfy all our needs

2 What would be included in the factor of production land?

A bread
B factory building
C sports arena
D wheat

3 A deposit of shale oil is discovered in an area of farming.

The following estimates are made for a ten-year period.

• If the land is used only for farming, it would yield income after tax of $10 billion.
• If the land is used only for shale oil extraction, it would yield income after tax of
$40 billion.
• The government would receive $5 billion in taxes from farming and $10 billion in
taxes from shale oil extraction.

What is the opportunity cost of using the land only for farming?

A $25 billion B $30 billion C $35 billion D $45 billion

4 What three key questions determine resource allocation?

A what, how, for whom

B what, when, for whom
C where, what, how
D where, how, for whom

© UCLES 2024 06_0455_13_2024_1.9

 3

5 In the diagram, X represents the original equilibrium point in the labour market for engineers. An
increase in the skills of engineers results in an increase in productivity.

Which point represents the new equilibrium in the labour market for engineers?

wage
S2

A S1

B S3
X
C
D

D3
D1
D2
O
quantity of labour

6 An explosion in an important oil pipeline causes the world price of a barrel of oil to increase from
$50 to $100. Before the explosion, the world demand for oil was 100 million barrels per day. The
world price elasticity of demand for oil is −0.2.

What is the new global demand for oil (barrels per day) as a result of the explosion?

A 20 million
B 80 million
C 90 million
D 120 million

7 What is included in the study of microeconomics?

A demand-pull inflation
B diseconomies of scale
C increasing unemployment
D the size of the budget deficit

© UCLES 2024 06_0455_13_2024_1.9 [Turn over

 4

8 The price elasticity of supply (PES) of a product is 1.0.

The price of this product is $10 and the quantity supplied is 200 units.

If the price of the product increases to $11, by how many units will the quantity supplied increase?

A 1 unit
B 10 units
C 20 units
D 200 units

9 The government wishes to reduce the harmful emissions from road transport.

Which measure would be effective in helping to achieve this aim?

A increased expenditure on oil exploration

B introducing a subsidy on public transport
C reduced taxation on the production of private vehicles
D reducing incentives to purchase electric vehicles

10 What function does a central bank provide for an economy?

A It issues bank notes to encourage spending.

B It manages the debt of private sector firms.
C It offers high interest rate accounts to encourage savings.
D It provides mortgages to encourage home ownership.

11 A firm changes from producing individual pieces of wooden furniture by hand to a mechanised
production process using the division of labour.

What is the most likely set of outcomes as a result?

outcome 1 outcome 2 outcome 3

A worker motivation average total cost total costs will

will increase will increase increase
B worker motivation average total cost total costs will
will decrease will increase increase
C worker motivation average total cost total costs will
will decrease will decrease increase
D worker motivation average total cost total costs will
will decrease will decrease decrease

© UCLES 2024 06_0455_13_2024_1.9

 5

12 What is the best definition of a trade union?

A a group of countries that negotiates trade agreements

B a group of firms that negotiates removing obstacles to trade
C a group of workers that negotiates collectively on pay
D a group of workers that negotiates fixing prices

13 What is most likely to be a disadvantage when operating a small firm?

A a lack of external economies of scale

B a lack of external diseconomies of scale
C a lack of internal economies of scale
D a lack of internal diseconomies of scale

14 A firm increased output from Q1 to Q2 and achieved economies of scale.

How is this shown on the firm's average total cost curve (ATC)?

A B

costs ATC costs ATC

C1 C2
C2 C1

O Q1 Q2 O Q1 Q2
output output

C D

costs C2 costs C2

C1 C1

ATC ATC

O Q1 Q2 O Q2 Q1
output output

© UCLES 2024 06_0455_13_2024_1.9 [Turn over

 6

15 A busy restaurant employs a large number of highly skilled chefs to individually prepare high quality
meals.

What is an advantage to the restaurant of this type of production?

A A highly skilled chef is paid more than an unskilled cook.

B It is easier to prepare a wide variety of meals.
C It takes time to train a highly skilled chef.
D The quality of a meal varies according to which chef prepares it.

16 How is the average cost of a product calculated?

A by adding total variable and total fixed costs

B by dividing total cost by output
C by multiplying total variable cost by output
D by subtracting fixed cost from total cost

17 Why might measures to reduce unemployment also make inflation rise?

A They encourage cheap imports.

B They increase demand.
C They reduce firms’ costs.
D They require wages to fall.

© UCLES 2024 06_0455_13_2024_1.9

 7

18 The diagram shows selected areas of government spending for a country.

national
$32.2bn
$32.2 bn
defence
education $36.4bn
$36.4 bn

health $81.8bn
$81.8 bn
unemployment
$180.1bn
$180.1 bn
benefits
0 20 40 60 80 100 120 140 160 180 200

What was the total government spending on merit goods?

A $32.2 billion
B $81.8 billion
C $118.2 billion
D $261.9 billion

19 What correctly explains the effect of monetary policy measures on macroeconomic aims?

A A higher exchange rate will make imports more expensive and improve the balance of
payments.
B An increase in interest rates will encourage investment and lead to higher economic growth.
C An increase in the money supply in an economy without spare capacity will result in
demand-pull inflation.
D Higher interest rates result in less income from savings and therefore higher unemployment.

20 What is the most likely impact of lower direct taxes on demand and on supply?

demand supply

A decrease decrease
B decrease increase
C increase increase
D increase decrease

© UCLES 2024 06_0455_13_2024_1.9 [Turn over

 8

21 The table shows the annual change in Gross Domestic Product (GDP) before adjustments for
inflation have been made and the annual rate of inflation in four countries.

Which country has the highest rate of growth in real GDP?

change in GDP inflation rate

% %

A 5 6
B 10 7
C 15 14
D 20 40

22 Which type of unemployment is generally regarded by economists as the least serious for the
economy?

A cyclical
B frictional
C regional
D structural

23 The Consumer Prices Index (CPI) for a country rose during one year from 125 to 150.

What was the country's rate of inflation?

A 20% B 25% C 125% D 150%

24 What does the Human Development Index (HDI) indicate?

A economic development
B level of unemployment
C living standards
D rate of inflation

25 What best describes relative poverty?

A A 12-year-old boy has never been able to access a doctor or school.

B A person earns less than the minimum defined level of income.
C A person has a lower living standard than the minimum level acceptable in a society.
D A person is unable to afford the basic necessities of life.

© UCLES 2024 06_0455_13_2024_1.9

 9

26 The table shows population statistics for three countries in a particular year.

birth rate death rate

population size (per thousand (per thousand
country net migration
(millions) of population of population
per year) per year)

X 20 10 8 +20 000

Y 30 20 18 +50 000

Z 40 40 35 −1 000 000

What can be concluded from the table?

A country X has fewer females than country Y

B country Y has the smallest population increase
C country Y has the highest living standards
D country Z has a decreasing population

27 What is most likely to promote international specialisation?

A similarities in climate in different countries

B similarities in the availability of natural resources in different countries
C instability in foreign exchange rates
D the abolition of tariffs and customs duties

28 What are the effects on price and equilibrium quantity of the imposition of an import tariff on a good?

equilibrium
price
quantity

A decreases decreases
B decreases increases
C increases decreases
D increases increases

© UCLES 2024 06_0455_13_2024_1.9 [Turn over

 10

29 The diagram shows the market for the Indian rupee in US$.

price of S1
rupees
(in $)

D2
D1
O quantity
of rupees

What will cause the demand curve for rupees to shift from D1 to D2?

A a fall in Indian exports to the US

B a fall in the US inflation rate
C a rise in foreign direct investment into India
D a rise in interest rates in the US

30 The diagram shows China’s trade with Brazil for two years.

China’s exports key

year 1
China’s imports year 2

0 1 2 3 4 5
$ billion

What happened to China’s trade balance with Brazil between year 1 and year 2?

A It experienced a falling surplus.

B It experienced a rising deficit.
C It moved from deficit to surplus.
D It moved from surplus to deficit.

© UCLES 2024 06_0455_13_2024_1.9

0455/13 Cambridge IGCSE – Mark Scheme May/June 2024
PUBLISHED

Question Answer Marks

1 C 1

2 D 1

3 C 1

4 A 1

5 B 1

6 B 1

7 B 1

8 C 1

9 B 1

10 A 1

11 C 1

12 C 1

13 C 1

14 A 1

15 B 1

16 B 1

17 B 1

18 C 1

19 C 1

20 C 1

21 B 1

22 B 1

23 A 1

24 C 1

25 C 1

26 D 1

27 D 29 - C 1

28 C 30 - D 1

© Cambridge University Press & Assessment 2024 Page 2 of 3

 Cambridge IGCSE™

ECONOMICS 0455/13
Paper 1 Multiple Choice October/November 2020
45 minutes

You must answer on the multiple choice answer sheet.

*6621734310*

You will need: Multiple choice answer sheet

Soft clean eraser
Soft pencil (type B or HB is recommended)

INSTRUCTIONS
 There are thirty questions on this paper. Answer all questions.
 For each question there are four possible answers A, B, C and D. Choose the one you consider correct
and record your choice in soft pencil on the multiple choice answer sheet.
 Follow the instructions on the multiple choice answer sheet.
 Write in soft pencil.
 Write your name, centre number and candidate number on the multiple choice answer sheet in the
spaces provided unless this has been done for you.
 Do not use correction fluid.
 Do not write on any bar codes.
 You may use a calculator.

INFORMATION
 The total mark for this paper is 30.
 Each correct answer will score one mark. A mark will not be deducted for a wrong answer.
 Any rough working should be done on this question paper.

This document has 12 pages. Blank pages are indicated.

IB20 11_0455_13/3RP
© UCLES 2020 [Turn over
 2

1 Why do consumers have to make choices when spending their income?

A Advertising encourages consumer spending.

B Consumers have unlimited incomes.
C Consumer wants cannot all be satisfied with their income.
D Not all products will be attractive to consumers.

2 What is the key role of an entrepreneur?

A inventor
B risk taker
C shareholder
D worker

3 The diagram shows the production possibility curve (PPC) of an economy producing at point X.

capital 100
goods
X
70

0
0 180 240
consumer
goods

What would be the opportunity cost of moving from point X to produce only consumer goods?

A 60 units of consumer goods

B 70 units of capital goods
C 100 units of capital goods
D 180 units of consumer goods

© UCLES 2020 0455/13/O/N/20

 3

4 Economics is divided into two: microeconomics and macroeconomics.

statement 1 When the price of oil falls there is an expansion in demand.

statement 2 The Organization of the Petroleum Exporting Countries (OPEC) can

influence the price of oil.

Which combination correctly describes these two statements?

statement 1 statement 2

A macroeconomic statement macroeconomic statement

B macroeconomic statement microeconomic statement
C microeconomic statement macroeconomic statement
D microeconomic statement microeconomic statement

5 What is a disadvantage of a market economic system?

A Entrepreneurs lack incentives to produce what consumers want.

B Government intervention will reduce the efficiency of firms.
C Market dominance by firms can lead to higher prices.
D There is underproduction of demerit goods.

6 The diagram shows the demand curve for coffee in the US.

price

P1

P2
demand for coffee

O Q1 Q2 quantity

Why did the quantity demanded move from Q1 to Q2?

A Coffee became cheaper.

B Incomes rose in the US.
C There was a successful advertising campaign by coffee retailers.
D The price of substitutes for coffee rose.

© UCLES 2020 0455/13/O/N/20 [Turn over

 4

7 In an African country with large areas of tropical desert the price elasticity of demand for salt is
highly inelastic. This will result in greater consumer expenditure on salt when price changes from
P1 to P2.

Which diagram illustrates this situation?

A B

price price
of salt of salt

P2 P2
P1 P1
D

D
O quantity O quantity

C D

price price
of salt of salt

P2 P2
P1 D P1

D
O quantity O quantity

8 In which occupation would wages tend to increase?

A in those where a worker is paid weekly

B in those where a worker needs less training
C in those where there is an excess demand for labour
D in those where work becomes less dangerous

9 Which row shows a characteristic of money and a function of money?

characteristic function

A acceptability medium of exchange

B cash measure of value
C divisibility portability
D store of value bank deposit

© UCLES 2020 0455/13/O/N/20

 5

10 The table shows how household spending changes with income.

income spending
($ per month) ($ per month)

3000 3150
3300 3375
3600 3500
3900 3825
4200 4050
4500 4275

What is the lowest level of income at which savings are positive?

A $3000 B $3600 C $3900 D $4200

11 What can a central bank increase in order to reduce consumer borrowing?

A commercial bank deposits

B government spending
C the exchange rate
D the rate of interest

12 The table shows the total cost of firm X at each level of output.

output total cost

0 3
1 5
2 6
3 9

At which level of output does total variable cost exceed total fixed cost?

A 0 B 1 C 2 D 3

13 A firm has fixed costs of $1000. The table shows the variable cost at different levels of output.

output (units) 1 2 3 4
variable cost ($) 100 190 270 350

If the goods are sold for $500 each, how much profit will be made from the sale of 4 units?

A $650 B $1000 C $1650 D $2000

© UCLES 2020 0455/13/O/N/20 [Turn over

 6

14 Which combination is usually found in a monopoly?

A many buyers and many sellers

B many buyers and single seller
C single buyer and many sellers
D single buyer and single seller

15 What is usually considered to be an advantage to a firm of using division of labour?

A high labour turnover

B increased mechanisation
C movement of labour between tasks
D need for quality control

16 What are two aims that a government normally pursues when managing the performance of the
whole economy?

A to encourage an increase in production and to prevent high inflation

B to ensure no one is unemployed and to reduce exports
C to give everyone equal incomes and to increase government revenue
D to protect the environment and to reduce interest rates

17 What is most likely to be the responsibility of a central government?

A the provision of immigration officials at an airport

B the provision of security cameras in a shopping centre
C the provision of security staff at a bank
D the provision of ticket inspectors on a train

18 A government decreased the tax on all goods produced in its country.

What is the most likely consequence of this?

A a decrease in exports
B an increase in imports
C an increase in production
D a worsening of the balance of trade in goods

© UCLES 2020 0455/13/O/N/20

 7

19 Which government policy measure would cause an increase in a country’s supply of labour?

A increasing unemployment benefits

B lowering interest rates
C raising income tax
D raising the age of retirement

20 Due to a rise in the number of retired people, there has been increased demand for some
government expenditure.

Which type of government expenditure is most likely to be directly affected?

A defence
B health services
C re-training grants
D street lighting

21 The diagrams show Italy’s unemployment rate and GDP per head.

Italy’s unemployment rate Italy’s GDP per head

13 39 000
% $
38 000
11
37 000
9 36 000
35 000
7
34 000
5 33 000
2000 2005 2010 2015 2000 2005 2010 2015
year year

When do Italy’s unemployment rate and GDP per head rise at the same time?

A 2000–2001
B 2007–2008
C 2009–2010
D 2014–2015

© UCLES 2020 0455/13/O/N/20 [Turn over

 8

22 An economy is experiencing rising prices.

Which government policy will help reduce consumer expenditure?

A introducing compulsory saving for income earners

B investing more in building infrastructure
C issuing more banknotes and coins
D reducing indirect taxes

23 Some goods take a greater percentage of a typical household’s total spending than others.

How is this accounted for in the construction of a consumer prices index?

A by deducting the goods

B by giving a weight to the goods
C by taking an average of price fluctuations during a year
D by using the price elasticity of demand for the goods

24 One of the indicators of living standards is the Human Development Index (HDI).

What is not taken into consideration when calculating the HDI?

A education
B income per head
C level of savings
D life expectancy

25 Which factor in the world’s low-income countries limits their economic development?

A balance of payments surpluses

B high saving ratios
C large inflows of foreign investment
D rapid population growth

© UCLES 2020 0455/13/O/N/20

 9

26 The table shows the percentage employment in the primary, secondary and service sectors in
four countries.

Which country is likely to be the most developed?

percentage employment
primary secondary service
country
sector sector sector

A 10 35 55
B 20 60 20
C 35 35 30
D 40 40 20

27 What would not be included in the current account of the balance of payments?

A dividends earned from a firm in another country

B imports of TVs from another country
C purchase of a house in another country
D rents paid to owners of land in another country

28 What is most likely to discourage international specialisation and trade for an economy?

A decreasing labour supply

B decreasing transport costs
C increasing oil prices
D increasing trade barriers

29 Many low-income countries rely on multinational companies (MNCs) to provide economic

development.

What is a disadvantage of this for the low-income country?

A Local firms close because MNCs are more efficient.

B New production techniques are introduced.
C The balance of payments may improve.
D The MNCs have to pay taxes on their profits.

© UCLES 2020 0455/13/O/N/20 [Turn over

 10

30 The diagram shows the value of a country’s exports and imports of goods over five years.

30
$m 25
key
20
exports of goods
15
imports of goods
10

5
0
1 2 3 4 5

year

Between which two years did the country have an increase in the value of imports and an
improvement in its balance of trade in goods?

A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5

© UCLES 2020 0455/13/O/N/20

Cambridge IGCSE™

ECONOMICS 0455/13
Paper 1 Multiple Choice October/November 2020
MARK SCHEME
Maximum Mark: 30

Published

This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of the
examination.

Mark schemes should be read in conjunction with the question paper and the Principal Examiner Report for
Teachers.

Cambridge International will not enter into discussions about these mark schemes.

Cambridge International is publishing the mark schemes for the October/November 2020 series for most
Cambridge IGCSE™, Cambridge International A and AS Level and Cambridge Pre-U components, and some
Cambridge O Level components.

This document consists of 3 printed pages.

© UCLES 2020 [Turn over

0455/13 Cambridge IGCSE – Mark Scheme October/November
PUBLISHED 2020

Question Answer Marks

1 C 1

2 B 1

3 B 1

4 D 1

5 C 1

6 A 1

7 D 1

8 C 1

9 A 1

10 B 1

11 D 1

12 D 1

13 A 1

14 B 1

15 B 1

16 A 1

17 A 1

18 C 1

19 D 1

20 B 1

21 B 1

22 A 1

23 B 1

24 C 1

25 D 1

26 A 1

27 C 29 - A 1

28 D 30 - C 1

© UCLES 2020 Page 2 of 3

 2

1 Why do consumers have to make choices when spending their income?

A Advertising encourages consumer spending.

B Consumers have unlimited incomes.
C Consumer wants cannot all be satisfied with their income.
D Not all products will be attractive to consumers.

2 What is the key role of an entrepreneur?

A inventor
B risk taker
C shareholder
D worker

3 The diagram shows the production possibility curve (PPC) of an economy producing at point X.

capital 100
goods
X
70

0
0 180 240
consumer
goods

What would be the opportunity cost of moving from point X to produce only consumer goods?

A 60 units of consumer goods

B 70 units of capital goods
C 100 units of capital goods
D 180 units of consumer goods

© UCLES 2020 0455/13/O/N/20

 3

4 Economics is divided into two: microeconomics and macroeconomics.

statement 1 When the price of oil falls there is an expansion in demand.

statement 2 The Organization of the Petroleum Exporting Countries (OPEC) can

influence the price of oil.

Which combination correctly describes these two statements?

statement 1 statement 2

A macroeconomic statement macroeconomic statement

B macroeconomic statement microeconomic statement
C microeconomic statement macroeconomic statement
D microeconomic statement microeconomic statement

5 What is a disadvantage of a market economic system?

A Entrepreneurs lack incentives to produce what consumers want.

B Government intervention will reduce the efficiency of firms.
C Market dominance by firms can lead to higher prices.
D There is underproduction of demerit goods.

6 The diagram shows the demand curve for coffee in the US.

price

P1

P2
demand for coffee

O Q1 Q2 quantity

Why did the quantity demanded move from Q1 to Q2?

A Coffee became cheaper.

B Incomes rose in the US.
C There was a successful advertising campaign by coffee retailers.
D The price of substitutes for coffee rose.

© UCLES 2020 0455/13/O/N/20 [Turn over

 4

7 In an African country with large areas of tropical desert the price elasticity of demand for salt is
highly inelastic. This will result in greater consumer expenditure on salt when price changes from
P1 to P2.

Which diagram illustrates this situation?

A B

price price
of salt of salt

P2 P2
P1 P1
D

D
O quantity O quantity

C D

price price
of salt of salt

P2 P2
P1 D P1

D
O quantity O quantity

8 In which occupation would wages tend to increase?

A in those where a worker is paid weekly

B in those where a worker needs less training
C in those where there is an excess demand for labour
D in those where work becomes less dangerous

9 Which row shows a characteristic of money and a function of money?

characteristic function

A acceptability medium of exchange

B cash measure of value
C divisibility portability
D store of value bank deposit

© UCLES 2020 0455/13/O/N/20

 5

10 The table shows how household spending changes with income.

income spending
($ per month) ($ per month)

3000 3150
3300 3375
3600 3500
3900 3825
4200 4050
4500 4275

What is the lowest level of income at which savings are positive?

A $3000 B $3600 C $3900 D $4200

11 What can a central bank increase in order to reduce consumer borrowing?

A commercial bank deposits

B government spending
C the exchange rate
D the rate of interest

12 The table shows the total cost of firm X at each level of output.

output total cost

0 3
1 5
2 6
3 9

At which level of output does total variable cost exceed total fixed cost?

A 0 B 1 C 2 D 3

13 A firm has fixed costs of $1000. The table shows the variable cost at different levels of output.

output (units) 1 2 3 4
variable cost ($) 100 190 270 350

If the goods are sold for $500 each, how much profit will be made from the sale of 4 units?

A $650 B $1000 C $1650 D $2000

© UCLES 2020 0455/13/O/N/20 [Turn over

 6

14 Which combination is usually found in a monopoly?

A many buyers and many sellers

B many buyers and single seller
C single buyer and many sellers
D single buyer and single seller

15 What is usually considered to be an advantage to a firm of using division of labour?

A high labour turnover

B increased mechanisation
C movement of labour between tasks
D need for quality control

16 What are two aims that a government normally pursues when managing the performance of the
whole economy?

A to encourage an increase in production and to prevent high inflation

B to ensure no one is unemployed and to reduce exports
C to give everyone equal incomes and to increase government revenue
D to protect the environment and to reduce interest rates

17 What is most likely to be the responsibility of a central government?

A the provision of immigration officials at an airport

B the provision of security cameras in a shopping centre
C the provision of security staff at a bank
D the provision of ticket inspectors on a train

18 A government decreased the tax on all goods produced in its country.

What is the most likely consequence of this?

A a decrease in exports
B an increase in imports
C an increase in production
D a worsening of the balance of trade in goods

© UCLES 2020 0455/13/O/N/20

 7

19 Which government policy measure would cause an increase in a country’s supply of labour?

A increasing unemployment benefits

B lowering interest rates
C raising income tax
D raising the age of retirement

20 Due to a rise in the number of retired people, there has been increased demand for some
government expenditure.

Which type of government expenditure is most likely to be directly affected?

A defence
B health services
C re-training grants
D street lighting

21 The diagrams show Italy’s unemployment rate and GDP per head.

Italy’s unemployment rate Italy’s GDP per head

13 39 000
% $
38 000
11
37 000
9 36 000
35 000
7
34 000
5 33 000
2000 2005 2010 2015 2000 2005 2010 2015
year year

When do Italy’s unemployment rate and GDP per head rise at the same time?

A 2000–2001
B 2007–2008
C 2009–2010
D 2014–2015

© UCLES 2020 0455/13/O/N/20 [Turn over

 8

22 An economy is experiencing rising prices.

Which government policy will help reduce consumer expenditure?

A introducing compulsory saving for income earners

B investing more in building infrastructure
C issuing more banknotes and coins
D reducing indirect taxes

23 Some goods take a greater percentage of a typical household’s total spending than others.

How is this accounted for in the construction of a consumer prices index?

A by deducting the goods

B by giving a weight to the goods
C by taking an average of price fluctuations during a year
D by using the price elasticity of demand for the goods

24 One of the indicators of living standards is the Human Development Index (HDI).

What is not taken into consideration when calculating the HDI?

A education
B income per head
C level of savings
D life expectancy

25 Which factor in the world’s low-income countries limits their economic development?

A balance of payments surpluses

B high saving ratios
C large inflows of foreign investment
D rapid population growth

© UCLES 2020 0455/13/O/N/20

 9

26 The table shows the percentage employment in the primary, secondary and service sectors in
four countries.

Which country is likely to be the most developed?

percentage employment
primary secondary service
country
sector sector sector

A 10 35 55
B 20 60 20
C 35 35 30
D 40 40 20

27 What would not be included in the current account of the balance of payments?

A dividends earned from a firm in another country

B imports of TVs from another country
C purchase of a house in another country
D rents paid to owners of land in another country

28 What is most likely to discourage international specialisation and trade for an economy?

A decreasing labour supply

B decreasing transport costs
C increasing oil prices
D increasing trade barriers

29 Many low-income countries rely on multinational companies (MNCs) to provide economic

development.

What is a disadvantage of this for the low-income country?

A Local firms close because MNCs are more efficient.

B New production techniques are introduced.
C The balance of payments may improve.
D The MNCs have to pay taxes on their profits.

© UCLES 2020 0455/13/O/N/20 [Turn over

 10

30 The diagram shows the value of a country’s exports and imports of goods over five years.

30
$m 25
key
20
exports of goods
15
imports of goods
10

5
0
1 2 3 4 5

year

Between which two years did the country have an increase in the value of imports and an
improvement in its balance of trade in goods?

A 1 and 2 B 2 and 3 C 3 and 4 D 4 and 5

© UCLES 2020 0455/13/O/N/20

0455/13 Cambridge IGCSE – Mark Scheme October/November
PUBLISHED 2020

Question Answer Marks

1 C 1

2 B 1

3 B 1

4 D 1

5 C 1

6 A 1

7 D 1

8 C 1

9 A 1

10 B 1

11 D 1

12 D 1

13 A 1

14 B 1

15 B 1

16 A 1

17 A 1

18 C 1

19 D 1

20 B 1

21 B 1

22 A 1

23 B 1

24 C 1

25 D 1

26 A 1

27 C 29 - A 1

28 D 30 - C 1

© UCLES 2020 Page 2 of 3

 2

1 What is the cause of the economic problem facing the global market for gold?

A Consumer wants for gold are limited.

B Gold is a limited resource.
C Only governments can sell gold.
D There is an unlimited supply of gold.

2 The management of an airline decided to replace its aeroplanes with more technologically advanced
aircraft. At the same time, the company retrained its pilots.

Which factors of production has the airline improved?

A capital and labour

B capital and land
C labour and enterprise
D land and enterprise

3 The diagram shows the choices for an individual between leisure and earnings.

18
hours of 15
leisure
per day 12
X
9
Y
6

0
10 20 30 40 50 60
earnings $

What is the opportunity cost to the individual of the extra earnings when moving from position X to
position Y?

A $10
B $40
C 3 hours of leisure per day
D 6 hours of leisure per day

© UCLES 2024 11_0455_13_2024_1.7a

 3

4 The world price of cocoa has been falling while the prices of products made from cocoa have been
rising.

Which combination might explain this?

advertising expenditure
market for cocoa
on products made from cocoa

A excess demand decrease

B excess supply decrease
C excess demand increase
D excess supply increase

5 The table shows the amounts demanded and supplied of tomatoes at different prices. The initial
equilibrium is at a price of $40.

price demand supply

($) (kg) (kg)

10 20 2
20 16 5
30 12 8
40 10 10
50 8 12

The following year, more efficient harvesting means that the supply increases by 50% at each price.

What will happen to the suppliers’ total revenue?

A It will fall by $10.

B It will fall by $40.
C It will rise by $10.
D It will rise by $200.

6 A fall in which variable would help eliminate a market shortage?

A quantity demanded
B price
C quantity supplied
D the number of firms

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7 When the price of meat increased from $5 to $6 per kg, Joe decreased his purchase of meat from
40 kg to 20 kg a month.

What was Joe’s price elasticity of demand for meat?

A 0.4 B 2.0 C 2.5 D 20

8 In the diagram, which line represents perfectly inelastic supply?

B
A C
price $

O quantity

9 What is external benefit?

A private benefits minus private costs

B private benefits plus social benefits
C social benefits minus private benefits
D social benefits plus social costs

10 What is a function of a commercial bank?

A accepting deposits
B controlling money supply
C issuing notes and coins
D lending money to the government

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11 Under which circumstances are households more likely to save?

unemployment
inflation rate interest rate
rate

A high high high

B high high low
C low high low
D low low low

12 A country wishes to increase the supply of nurses.

What would be the most effective way of achieving this?

A extending the training period for nurses

B improving the working conditions of nurses
C increasing the national minimum wage
D reducing grants for trainee nurses

13 Employers based in large cities often pay employees special allowances above standard pay rates.

What is the most likely reason for this?

A Job security and promotion prospects tend to be restricted.

B Living costs and transport costs tend to be high.
C There are few alternative job opportunities available.
D Trade unions negotiate nationwide wage levels.

14 Workers in a country have been concerned about their wages not keeping pace with inflation.

How can trade unions assist workers in getting a pay rise?

A advise the workers to ask individually for a pay rise

B negotiate on behalf of their members to secure a pay rise
C offer to contribute financially to a pay rise
D request improved working conditions

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15 How is total revenue calculated?

A price divided by the total output

B total output divided by the price
C total output multiplied by the price
D total output multiplied by total costs

16 There is a number of cafés selling snacks and drinks in a city centre. Several of these cafés close
due to their owners retiring.

What is the likely effect on the prices and profits of the remaining cafés?

prices profits

A decrease decrease
B decrease increase
C increase decrease
D increase increase

17 What is a macroeconomic aim of government?

A equilibrium prices in markets

B high wages
C low inflation
D profit maximisation

18 The table shows earnings and total income tax paid per year.

earnings $ total income tax paid $

5000 1000
8000 2000
9000 3000

Which type of tax system does this illustrate?

A indirect
B progressive
C proportional
D regressive

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19 What is an example of monetary policy?

A an increase in government spending

B an increase in indirect taxation
C an increase in rules and regulations
D an increase in the money supply

20 What is Gross Domestic Product (GDP) divided by in order to calculate GDP per head?

A the adult population

B the dependent population
C the total population
D the working population

21 What is the consequence of economic growth for individuals and for the economy?

individuals the economy

A increase in absolute poverty increase in inflation

B increase in average incomes increase in government tax revenue
C increase in the variety of goods and services reduction in exports
D increase in unemployment reduction in the standard of living

22 What does the labour force survey (LFS) measure?

A the number of workers on the national minimum wage

B the proportion of women in the labour force
C the unemployed population
D trade union membership

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23 The table shows the weights allocated to the three items in a Consumer Prices Index (CPI) for two
years.

weights
item
year 1 year 2

food 30 35
clothing 20 15
housing 50 50
total 100 100

What can be concluded from this data?

A Clothing prices have fallen.

B Living standards remain unchanged.
C The average price level is unchanged.
D The proportion of income spent on food has risen.

24 A government increases the rate of progressive income tax and its spending on hospitals.

What is likely to happen to the distribution of income and to living standards?

distribution of income living standards

A becomes less even fall

B becomes less even rise
C becomes more even fall
D becomes more even rise

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25 The population pyramids for country 1 and country 2 in a given year are shown.

country 1 country 2

male 100+ female male 100+ female

95–99 95–99
90–94 90–94
85–89 85–89
80–84 80–84
75–79 75–79
70–74 70–74
65–69 65–69
60–64 60–64
55–59 55–59
50–54 50–54
45–49 45–49
40–44 40–44
35–39 35–39
30–34 30–34
25–29 25–29
20–24 20–24
15–19 15–19
10–14 10–14
5–9 5–9
0–4 0–4
10 8 6 4 2 0 0 2 4 6 8 10 10 8 6 4 2 0 0 2 4 6 8 10

percentage percentage

What can be deduced from these population pyramids?

A Country 1 has a greater population size than country 2.

B Country 1 has a higher life expectancy than country 2.
C Country 2 has a lower death rate than country 1.
D Country 2 spends more money on childcare than country 1.

26 Which country would be classified as the most developed based on the data in the table?

gross domestic
population
product per year
(millions)
($m)

A 600 3
B 700 2
C 12 000 40
D 15 000 100

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27 What encourages international specialisation?

A a foreign exchange shortage

B diseconomies of scale
C free trade
D quotas

28 A country wants to limit the number of imported cars to a maximum of 100 000 in a year.

Which measure is most likely to achieve this objective?

A an embargo
B an import quota
C an import tariff
D a subsidy

29 The diagram shows a change in the exchange rate for the Indian rupee against the US$.

price of S1
Indian
rupee S2
P1
in US$
P2

D
O Q1 Q2
quantity of
Indian rupees

What could cause the change in the exchange rate?

A a decrease in the rate of inflation in India

B an increase in demand for imports by people in India
C greater foreign direct investment into India
D greater purchases of its own currency by the Indian central bank

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30 Country X records these selected items in the current account of its balance of payments.

• Country X exports $200m of goods.

• Country X imports $50m of services.

• Country Y’s citizens working in country X send home to relatives $25m.

• Country X sends country Y $75m of aid.

By how much did the balance on the current account of country X increase?

A $50m B $100m C $200m D $350m

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0455/13 Cambridge IGCSE – Mark Scheme October/November
PUBLISHED 2024

Question Answer Marks

1 B 1

2 A 1

3 C 1

4 D 1

5 B 1

6 A 1

7 C 1

8 B 1

9 C 1

10 A 1

11 C 1

12 B 1

13 B 1

14 B 1

15 C 1

16 D 1

17 C 1

18 B 1

19 D 1

20 C 1

21 B 1

22 C 1

23 D 1

24 D 1

25 B 1

26 B 1

27 C 29 - B 1

28 B 30 - A 1

© Cambridge University Press & Assessment 2024 Page 2 of 3