UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS
General Certificate of Education
Advanced Subsidiary Level and Advanced Level
Paper 1 Multiple Choice (Core)
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 12 printed pages.
© UCLES 2005
1 What is an essential feature of a pure market economy?
A Buyers and sellers have perfect knowledge.
B External costs are taxed.
C Prices respond to the demands of consumers.
D The government provides public goods.
The diagram shows a country’s production possibility curve.
What could allow the economy to move from M to N?
A an increase in consumer spending
B an increase in demand for exports
C an increase in government spending on pensions
D an increase in investment
3 What is an example of the factor of production capital?
A a bank account held by a small firm to be used for future purchases
B a forest of hardwood trees ideal for furniture making
the market va