1. IGCSE ECONS MCQ past papers

What is an example of the purchase of a consumer good?

• A farm owner buys a television

• A farm owner buys additional land.

• A farm owner buys fertiliser for their crops.

• A farm owner buys some farming equipment.

What is the function of the factors of production in an economy?

• to make goods and services to fulfil wants and needs

• to provide an even distribution of income

• to provide tax income for the government

• to reduce the existence of external costs

Which topic is included in microeconomics?

• inflation

• economic growth

• elasticity of demand

• the balance of payments

What aspect of demerit goods means they are overproduced?

• clear product information

• high external costs

• high product taxes

• low customer demand

Lithium is an essential metal for the production of electric cars. Following a 10% increase in the price of lithium, supplies increase by 15%. This led to a 5% increase in the price of electric cars.

What is the price elasticity of supply (PES) for lithium?

• 0.33

• 0.66

• 1.50

• 2.0

The wage of labour in a firm increases.

What is the most likely effect on the production process?

• Capital replaces labour immediately

• Capital replaces labour in the long run.

• Labour replaces capital immediately.

• Labour replaces capital in the long run.

What is most likely to lead to an improvement in labour productivity in an industry?

• an increase in capital investment

• an increase in income tax rates

• an increase in the demand for the industry’s product

• an increase in the number of firms in the industry

How is a government most likely to prevent the growth of monopolies?

• by encouraging mergers in the private sector

• by establishing nationalised industries

• by promoting the benefits of economies of scale

• by reducing barriers to entry into an industry

What is not included in public expenditure?

• capital spending by firms

• interest payments on government borrowing

• investment in defence by the central government

• subsidies to bus companies from local government

When is the budget described as balanced?

• when direct taxes and indirect taxes are equal

• when exports and imports are equal

• when government spending and government revenue are equal

• when the demand for money and the supply of money are equal