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Topics: Supply and demand, Externality, Welfare economics Pages: 12 (2329 words) Published: October 21, 2014
UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education
Advanced Subsidiary Level and Advanced Level

9708/01

ECONOMICS

May/June 2009

Paper 1 Multiple Choice (Core)

1 hour
Additional Materials:

*5574166390*

Multiple Choice Answer Sheet
Soft clean eraser
Soft pencil (type B or HB is recommended)

READ THESE INSTRUCTIONS FIRST
Write in soft pencil.
Do not use staples, paper clips, highlighters, glue or correction fluid. Write your name, Centre number and candidate number on the Answer Sheet in the spaces provided unless this has been done for you.

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 separate Answer Sheet. Read the instructions on the Answer Sheet very carefully.
Each correct answer will score one mark. A mark will not be deducted for a wrong answer. Any rough working should be done in this booklet.

This document consists of 12 printed pages.
IB09 06_9708_01/3RP
© UCLES 2009

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2
1

Three women work in a pottery workshop, each dividing their time equally between three products. The table shows how many units of each product are made. plates

bowls

mugs

Jane

100

50

50

Sarah

50

100

50

Seema

50

50

100

total

200

200

200

Later, division of labour is introduced and each woman makes only the product in which she has absolute advantage.
What is the rise in total output?
A

2

150 units

B

300 units

C

600 units

D

900 units

The diagram shows two production possibility curves (EF and GH), before and after technological progress has taken place.

G
E
consumer
goods

X

O

Y

M F

H

capital goods
After technological progress has taken place, what is the opportunity cost in capital goods of producing OX consumer goods?
A

3

MH

B

OH

C

OM

D

YF

What must be true of a positive statement?
A

It is one that can be shown to be correct or incorrect.

B

It is one that deals with positive changes in economic well being.

C

It is one that is true by definition.

D

It is one with which everyone is in agreement.

© UCLES 2009

9708/01/M/J/09

3
4

In 2001, the Argentinian economy was in serious economic difficulties. At this time, Argentinians made everyday purchases using the country’s currency, the peso, but saved money in US dollars.
Which functions were the two currencies carrying out in Argentina in this case?

5

6

peso

US dollar

A

medium of exchange

standard for deferred payments

B

medium of exchange

store of value

C

unit of account

standard for deferred payments

D

unit of account

store of value

What is not held constant when aggregating individual firms’ supply curves to give the market supply curve?
A

the number of firms in the industry

B

the price of the product

C

the prices of factors of production

D

the state of technology

The table shows the demand for tickets for a concert.
price of tickets
$

quantity
demanded

20

6000

30

5000

40

4000

50

3000

The capacity of the concert hall is 6000.
What price should be charged to maximise total revenue?
A

$20

© UCLES 2009

B

$30

C

$40

9708/01/M/J/09

D

$50

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4
7

The table shows the demand and supply schedules for a good before and after the imposition of a tax.
price
($)

quantity
demanded

quantity supplied
before tax

quantity supplied
after tax

20

340

440

380

19

340

430

340

18

340

410

290

17

340

380

230

16

340

340

160

15

340

290

80

14

340

230

0

What was the amount of the tax?
A

8

$1
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