University of Cambridge International Examinations

University of Cambridge International Examinations

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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS General Certificate of Education Advanced Subsidiary Level and Advanced Level ECONOMICS Paper 1 Multiple Choice (Core) October/November 2004 1 hour
Additional Materials: 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 10 printed pages and 2 blank pages.
IB04 11_9708_01/3RP  UCLES 2004

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2 1 In a market economy, what is the basis for determining the allocation of factors of production? A B C D 2 the market share of companies the needs of the country the pattern of consumers’ spending the wealth of entrepreneurs

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

G E consumer goods






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 is meant by ‘ceteris paribus’ in economic analysis? A B C D A normative approach is being adopted. The effect of a change of one variable is being considered in isolation. One good has to be sacrificed to obtain more of another. One factor of production is fixed.


Doctors should be paid...

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