IGCSE Economics Paper-1: Specimen Questions with Answers 56 - 57 of 64

Question 56

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Question

MCQ▾

If US build a dam using few machines and a great number of efficient labor, it is answering the ________ question

Choices

Choice (4)
a.How
b.What
c.Where
d.For whom

Answer

a.

Explanation

  • The central problem in economics is:
    • What and how much to produce
    • How to produce
    • For whom to produce
  • In this context, how to produce means which techniques of production are to be adopted. There are two types of techniques labor intensive and capital-intensive techniques. Labor-intensive technique means more labor and less capital. On the other hand, capital intensive means less labor and more capital. The choice of technique depends on the prices of the factors of production. If labor is cheap labor intensive technique will be considered whereas, if labor is expensive then capital intensive technique would by employed.
  • By reducing the number of machines and increasing, the number of efficient labors US answering the question of “how to produce. “

Question 57

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Question

MCQ▾

The table shows the quantity of tea demanded per day and the quantity supplied per day.

The table shows the quantity of tea demanded per day and the quantity supplied per day. The table shows the quantity of tea demanded per day and the quantity supplied per day.
Price ($) per kiloDemand (kilos)Supply (kilos)
121826
112228
103030
93432
83934
74438

At equilibrium price, what will be the total expenditure?

Choices

Choice (4)
a.$100
b.$300
c.$10
d.$30

Answer

b.

Explanation

  • The equilibrium point is determined in an economy where the quantity demanded intersects with the quantity supplied.
  • A consumer would be willing to buy more at a less price on the other hand a seller would be willing to sell at a higher price, where this demand and supply meets that will be the equilibrium point and at this point the equilibrium price is determined in the market at which the product will be bought and sold.
  • Total Expenditure is calculated by,
  • Therefore, According to the question equilibrium point is at price 10 where quantity demanded is equal to quantity supplied.
  • Total expenditure will be= $300.

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