Cambridge IGCSE Economics 0455 Paper 1 Mock Test 1 (Online, with Solutions)

About 0455 Paper 1 Mock Test 1

A full Cambridge IGCSE Economics 0455 Paper 1 practice test: 30 multiple-choice questions in 45 minutes, in the same order and topic balance as the real paper, from the basic economic problem to international trade. Calculator allowed.

It has 30 questions to finish in 45 minutes, the same time as the real 0455 Paper 1, which is sat on Wednesday 4 November 2026, afternoon (zone 4). There is one mark per question and no negative marking.

Topics in this mock

• The basic economic problem3
• The allocation of resources6
• Microeconomic decision makers7
• Government and the macroeconomy8
• Economic development2
• International trade and globalisation4

Worked examples (not from this test)

Try each one, then open the solution. They use the same methods as the questions in the mock.

1. The basic economic problem
   A farmer can use a field to grow wheat worth $5000 or maize worth $4000. She grows wheat. What is the opportunity cost?
   Show answer and working

   1. Opportunity cost is the next best alternative given up.
   2. By growing wheat, the farmer gives up the maize she could have grown.
   3. The opportunity cost is the maize worth $4000 (not the $5000 wheat she chose).

   Answer: maize worth $4000

2. The allocation of resources
   The price of a snack falls from $5 to $4 and the quantity demanded rises from 100 to 130 a day. Calculate the PED and say what happens to total revenue.
   Show answer and working

   1. % change in quantity = (130 − 100) ÷ 100 × 100 = +30%.
   2. % change in price = (4 − 5) ÷ 5 × 100 = −20%.
   3. PED = 30 ÷ −20 = −1.5, so demand is price-elastic.
   4. Revenue: 5 × 100 = $500 before, 4 × 130 = $520 after. With elastic demand a price cut raises revenue.

   Answer: PED = −1.5 (elastic); revenue rises from $500 to $520

3. Government and the macroeconomy
   A country has 28.8 million people employed and 1.2 million unemployed. What is the unemployment rate?
   Show answer and working

   1. Labour force = employed + unemployed = 28.8 + 1.2 = 30 million.
   2. Unemployment rate = 1.2 ÷ 30 × 100 = 4%.
   3. A common mistake is to divide by the number employed (1.2 ÷ 28.8 = 4.2%).

   Answer: 4%

4. International trade and globalisation
   A country’s trade in goods is −$12 billion, trade in services +$7 billion, net primary income +$2 billion and net secondary income −$1 billion. What is its current account balance?
   Show answer and working

   1. Current account = trade in goods + trade in services + primary income + secondary income.
   2. −12 + 7 + 2 − 1 = −4.
   3. The current account is in deficit by $4 billion.

   Answer: −$4 billion (a deficit)

5. Government and the macroeconomy
   Is a tax on petrol a direct or an indirect tax, and why?
   Show answer and working

   1. An indirect tax is a tax on spending, collected through the seller.
   2. A petrol tax is added to the price paid at the pump, so it is indirect.
   3. Direct taxes are taken from income or wealth, such as income tax and corporation tax.

   Answer: an indirect tax

6. International trade and globalisation
   A country’s currency depreciates. What happens to the price of its imports?
   Show answer and working

   1. A depreciation means each unit of the currency buys less foreign currency.
   2. Importers need more home currency to buy the same foreign goods, so import prices rise.
   3. At the same time exports become cheaper for foreign buyers.

   Answer: Imports become more expensive.

More practice: Mock Test 2 · Mock Test 3 · Mock Test 4 · All 0455 Paper 1 mock tests, exam facts and FAQ

Written and checked against the Cambridge International syllabus by the The Vector Academy economics team. Last updated 29 October 2026.