O Level Economics Paper 1 MCQ's June 2021 with Solution
Economics is a subject so we are sharing Economics Paper 1 MCQ's June 2021 of O Level. We shared this paper with solution so you can get this paper 1 of Economic with solution. We shared past papers with solution for your help you can find other stuff on our websites.
1.What is an advantage of competitive markets?
A. Competition causes inequalities of wealth
B. Competition encourages the efficient use of resources.
C. The Economic Problem of scarcity is eliminated
D. The right quantity of merit goods is guaranteed.
Answer: B
2. A multinational company (MNC) wishes to invest in a low income country to expand its palm oil production. What is most likely to make this investment possible?
A. High cost of clearing forests to increase land for plantations
B. Increased demand for palm oil
C. Shortage of labor in the rural economy
D. The removal of subsidies for palm oil production
2. Answer: B
3. A farmer sells land used for crops to firm that will use the land for wind turbines to produce electric power. What is the opportunity cost of this decision by farmer?
A. The cost of installing wind turbines
B. The loss of revenue from crops that grow on the land
C. The profit made from selling the land
D. The reduced cost of producing renewable energy
3. Answer: B
4. What is not included in microeconomics?
A. Economics of Scale
B. Forms of competition
C. Individual Demand
D. The Inflation Rate
4. Answer: D
5. What Determines a consumer's demand for a product?
5. Answer: A
6. Which Problem will be reduced by a government subsidy to a firm?
A. Absence of a public good
B. Abuse of monopoly power
C. Overconsumption of a merit demerit good
D. Underconsumption of a merit good
6: Answer: D
7. The Diagram Shows the market for information technology (IT) graduates. The original equilibrium was X. Later, more IT students graduated from university and greater use of artificial intelligence (AI) increased the demand for IT staff.
What is the new equilibrium?
7. Answer: C
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
8. Answer: D
9. What might cause consumers in a high income economy to both save more and spend money?
A. An increase in the rate of interest
B. An increase in wealth
C. Expectation that prices will fall in future
D. Inflation rising at a faster rate than wages
9. Answer: B
10. What would be a disadvantage of specialization for a worker?
A. A low price of product that they make
B. Boredom due to repetition of the same task
C. Higher quality of the goods
D. The opportunity to undertake training
10. Answer: B
11.The diagram shows a market for labor. X is the original equilibrium. A trade union negotiates a minimum wage at @, and the government restrict the supply of immigrant labor.
What is the equilibrium?
11. Answer: B
12. Which cost of production falls continuously an output increase?
A. Average fixed cost
B. Average total cost
C. Average Variable cost
D. Total Variable Cost
12. Answer: A
13. A Swedish furniture maker bought a Romanian firm that owned 83000 hectares of trees.
Which type of merger is this most likely to be?
A. Diversification
B. Horizontal
C. Vertical backwards
D. Vertical Forward
13. Answer: C
14. What is the calculated when price is multiplied by the quantity demanded of a product?
A. Average Revenue
B. Profit
C. Total Cost
D. Total Revenue
14. Answer: D
15. A Private sector firm is the only supplier of rail services between two cities.
What will stop the firm charging very high ticket prices?
A. Barriers to entry into rail services
B. Competition from public road transport
C. Government policy encouraging monopoly power
D. High cost of maintaining rail tracks
15. Answer: B
16. What is a fiscal policy measure?
A. Direct tax
B. Exchange rates
C. Interest Rates
D. Regulation
16. Answer: A
17. A Government uses expansionary monetary policy.
What does the government decrease?
A. Bank lending
B. Interest rates
C. The budget deficit
D. The money Supply
17. Answer: B
18. A country is experiencing unemployment. It has a progressive income tax policy and benefits for the poor. The government aims to increase employment and reduce income inequality.
Which fiscal policy measures are most likely to achieve these aims?
18. Answer: C
19. The table shows changes in the consumer Prices Index (CPI) from the base year, 1, and for the next three years.
Which statement is correct?
A. Consumer Prices were highest in year 3.
B. The rate of inflation was 2.1% in year 4.
C. The rate of inflation was highest in year 2.
D. The rate of inflation was lowest in year 1.
19. Answer: C
20. What is likely to happen when a country is experiencing deflation?
A. Consumers delay spending
B. Government raise interest rates
C. The level of imports increases.
D. The real value of money falls.
20. Answer: A
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.
21. Answer: D
22. The table compares the distribution of employment in selected industries in two years.
How did the distribution of employment change between year 1 and year 2?
22. Answer: B
23. In a year, two changed occurred in a company.
Company director' salaries increased by 15%.
Office workers' wages increased by 5%.
The rate of inflation was 3.4%.
What happened to real income?
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
24. Answer: D
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?
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