IGCSE Economics Practice Test

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• What can economies of scale allow a monopoly to do?
• What term describes the amount of goods and services that producers are willing to sell at a given price?
• What is the primary effect of inflation on purchasing power?
• What do we call the phenomenon where a company doubles its inputs and more than doubles its outputs?
• What does demand refer to in economic terms?
• How is opportunity cost best defined?
• What type of income is typically associated with earnings from investments or property?
• How is price elasticity of demand calculated?
• What term describes the market price where quantity demanded equals quantity supplied?
• Which economic term best describes a situation when the quantity demanded rose as the price fell?
• What is meant by product differentiation?
• Which type of market is characterized by neither consumers nor producers solely influencing prices?
• What type of economies involves specialization through employing specialists and using specialized machinery?
• What is the outcome of an increase in price for a good under normal circumstances?
• What are goods known as when they are demanded together?
• What describes the average cost of production at its optimum level?
• What is the main advantage of a corporation compared to other business structures?
• What is one advantage of a monopoly?
• What is an agreement between two firms to join together and form a new enterprise called?
• What is a characteristic of a monopolistic market structure?
• Which among these best illustrates private ownership in the context of economics?
• How does the law of supply and demand interact within labor markets?
• What causes cost-push inflation?
• What is typically the result when investment in technology rises?
• Which term refers to income generated from assets without the necessity of work?
• Which of the following is an example of a factor in the determination of supply?
• What is producer surplus?
• What is the effect of a falling price on quantity demanded?
• What is the primary industry primarily associated with?
• What does a negative cross elasticity of demand suggest?
• How is marginal product calculated?
• What typically happens when more units of production factors are added?
• If the income elasticity of demand is greater than 1, what type of good is it?
• What is a key characteristic of a planned economy?
• What is the term for a situation when a company doubles its inputs but less than doubles its outputs?
• Which of the following is an example of a price floor?
• What is the result of applying technical economies effectively?
• What economic principle means "all other things being equal" when analyzing determinants?
• What typically happens in a labor market if demand for a specific job increases?
• Which of the following best defines a 'leading indicator'?
• What type of goods are known as substitutes?
• Which factor contributes to a firm being located near raw materials?
• What is the labor market primarily concerned with?
• What are the four factors of production?
• What does fiscal policy refer to?
• Which of the following characteristics defines a monopoly?
• What characterizes a 'lagging indicator'?
• Which type of consumer good does not last long?
• How is unemployment defined?
• Which business structure allows owners to operate independently while enjoying the benefits of shared resources?
• What is the effect of increasing production on fixed costs?
• What does resource allocation refer to in economics?
• What does 'allocative efficiency' refer to?
• Which costs increase with the increase in production output?
• What is economic growth?
• What does inflation represent?
• Which of the following choices represents a combination of resources in production?
• What is gross domestic product (GDP)?
• What principle states that as a consumer has more of a commodity, the less utility they derive from each additional unit?
• What does the term 'productively efficient' refer to?
• What do the two types of consumer goods include?
• What kind of economies allow firms to take large loans and sell stocks on the stock exchange?
• Which of the following describes a normal good?
• What is being measured when analyzing how much a change in price affects demand?
• What does a negative YED indicate about a good?
• Which term describes the sharing of resources among individuals and firms in an economy?
• If the cross elasticity of demand is positive, what relationship do the two goods have?
• What is the significance of raw materials in primary industry?
• What is the purpose of a 'price ceiling'?
• What economic condition results when producers are unable to sell all the goods they have produced?
• Firms that are diversified and have multiple suppliers are benefiting from which type of economies?
• Why might a government impose a price floor on agricultural products?
• What is the purpose of economic indicators?
• What occurs when the total output increases as more factors of production are added?
• What does the circular flow of income model illustrate?
• Which mechanism do entrepreneurs utilize to determine what goods to produce?
• What are externalities?
• How is consumer surplus defined?
• Under which market structure are firms said to be productively and allocatively efficient?
• What characterizes a market structure?
• What are the 'determinants of supply'?
• What does cross elasticity of demand measure?
• What do we call the reduction in average costs as production output increases?
• In what kind of system do both producers and consumers influence what is produced and for whom?
• What are merit goods?
• What is characterized by a trade deficit?
• Which of the following directly leads to a shift in the demand curve?
• Which type of business structure offers flexibility to its owners regarding the division of profits?
• What is a price floor?
• What does the average product of labor represent?
• What does the law of diminishing returns describe?
• In a perfectly competitive market, which condition is true regarding firms?
• What role do investments play in enhancing productivity?
• What type of costs do not change when the level of output changes?
• Which of the following factors is most likely to affect a firm's decision on location?
• What does market failure refer to?
• What does the division of labour entail?
• What does a negative cross elasticity of demand indicate?
• What characteristic is associated with financial economies of scale?
• What type of business is owned and run by a single person who bears all profits and responsibilities?
• When a firm has abnormal profits, what is its economic position?
• What describes the 'business cycle'?
• What is recorded in the capital account?
• What is included in total costs?
• What is the term used when two firms in the same stage of industry combine resources?
• What is referred to when firms create wants for their products through methods like advertising?
• Which of the following is a result of a monopoly’s control over the market?
• Which term describes the satisfaction a consumer gains from buying goods and services?
• What defines an imperfect market?
• Which characteristic is NOT true of a perfectly competitive market?
• Which of the following terms refers to the costs that can change based on production output?
• Which type of wealth is characterized by ownership of goods and services by the government?
• What does the secondary industry focus on?
• What is the term for the cost of borrowing money?
• What form of business is often characterized by shared decision-making among its members?
• Which best defines a monopoly?
• What does the balance of payments record?
• Which type of goods is primarily designed to benefit consumers without regard for their ability to pay?
• What term describes a company that operates in more than one country with its headquarters in one country?
• Which business structure is owned by shareholders and offers limited liability?
• What does contraction of demand refer to?
• What term describes the cost of choosing one option over the next best alternative?
• Which type of economies of scale allows businesses to lower their costs due to high production volumes?
• What kind of business is owned by its workers who share profits and liabilities equally?
• What does protectionism aim to achieve?
• What occurs when average costs increase due to inefficiency within a firm?
• In which scenario would you typically see a price floor implemented by the government?
• What is the main function of the tertiary industry?
• Which factor of production typically involves the recruitment of individuals?
• What does the average product measure in economics?
• What does the term 'interdependence' refer to in economics?
• What encompasses both private and social wealth?
• What is a common effect when investments increase in an economy?
• Which statement best describes a positive statement?
• What are public goods identified by?
• What is the formula for calculating average revenue?
• What is the term for the market where buyers and sellers trade shares?
• What is the primary focus of monetary policy?
• Which type of business structure involves two or more partners who share profits and responsibilities?
• What is defined as the total revenue from selling goods multiplied by the quantity of goods sold?
• What type of policy is used to control inflation and stabilize a country’s currency?
• How is average costs calculated in the context of production?
• Which of the following factors is not considered a determinant of supply?
• What is the ultimate goal of investments within an economy?
• What term describes the reduction in value of capital equipment as it wears out?
• How is a 'recession' defined?
• Which of these is not a factor affecting demand?
• How do price floors potentially impact consumers?
• Which term is used to describe the market condition of having only one seller?
• Which type of goods is provided by the government to address societal needs regardless of individuals' ability to pay?
• What term describes a person who combines factors of production and takes on company risks?
• What does disequilibrium refer to in market terms?
• What does diminishing marginal utility represent?
• When a company doubles both its inputs and outputs, what type of returns does this represent?
• What is referred to as the economic problem?
• Which of these factors most directly influences wage levels in labor markets?
• What does globalization primarily involve?
• What term is used for goods purchased for direct satisfaction of wants?
• What are capital goods?
• What is demand-pull inflation?
• Which term is used to describe factors that lead to a decrease in demand?
• Why are financial markets considered important?
• What is the main role of a trade union?
• What term refers to the situation where the quantity demanded exceeds the quantity supplied?
• What does economic efficiency refer to in economic terms?
• Which point of production is when total costs equal total revenue?
• In economic terms, what is a market?
• What are consumer goods defined as?
• What describes the sum of both fixed and variable costs in production?
• What term describes the responsiveness of quantity demanded to a change in income?
• What is a key feature of a monetary union?
• What type of integration occurs when a firm combines with another firm in a previous stage of production?
• What does the term 'wage' refer to in economics?
• Which concept is used to answer a country's fundamental economic questions: what, how, and for whom?
• What does income elasticity of demand measure?
• Which economic concept refers to the interaction between sellers and buyers in determining prices?
• What is the supply and demand model used for?
• What is the basic economic problem that affects resource allocation?
• What is defined as money earned through work, such as wages or salary?
• What is a durable consumer good?
• What term describes goods and services owned by entrepreneurs in the private sector?
• What does the term privatization refer to?
• Which scenario would typically lead to an increase in demand for a good?
• What is achieved when costs are minimized while maximizing output?
• What advantages do marketing economies provide to firms?
• Which factor is most likely to cause increased productivity?
• Which of the following best describes the impact of a price floor on a market?
• What is the primary measure of wage differentials?
• How is price elasticity of demand defined?
• What is the primary function of labor markets?
• What are substitute goods?
• What is one primary role of the Bank of England?
• What type of financing involves money lent to small and risky businesses?
• What does 'deflation' encompass?
• Which condition describes when the quantity supplied is greater than the quantity demanded?
• Why are investments considered important for economic growth?
• What is 'utility maximization'?
• What type of goods are provided by the government because private firms do not find it profitable to produce them?
• Which of the following is NOT a factor that affects the location of firms?
• In terms of production, what does the total product represent?
• Which term describes a country's proficiency in producing specific goods or services?
• What term describes the state when profits are too low to draw in new firms?
• Which form of business ownership limits the liability of its owners to their investment in the company?
• Which type of economies involves buying items in bulk for discounts?
• What does the concept of comparative advantage describe?
• What does an increase in GDP typically indicate?
• How is productivity measured?
• What happens when the government imposes a price ceiling below the equilibrium price?
• What characterizes a normative statement?
• What type of loan is usually given for buying a property and is repaid over a period of 20-30 years?
• What is referred to when average costs worsen due to an increase in company size with inefficiencies?
• A market characterized by many firms offering identical products is known as:
• What is the primary aim of entrepreneurs in an economy?
• What does elasticity of demand measure?
• What is a disadvantage of a monopoly?
• What leads to wage differentials in the labor market?
• What does specialization refer to in an economic context?
• When total output is maximized while keeping costs low, what is being achieved?
• What term is used to define the system where goods and services are produced?