Cambridge IGCSE Economics 0455 Paper 1 Mock Test 2 (Online, with Solutions)

About 0455 Paper 1 Mock Test 2

Second full 0455 Paper 1 practice test: 30 new multiple-choice questions in 45 minutes, including PED, PPC and supply and demand diagrams, cost and revenue calculations, fiscal and monetary policy, and exchange rates.

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
   Why does the opportunity cost of producing more of one good usually rise as a country moves along its PPC?
   Show answer and working

   1. The PPC is usually curved (concave to the origin).
   2. At first a country moves the resources best suited to the new good, so little of the other good is lost.
   3. Later it has to move resources that are less suited, so more and more of the other good is given up.

   Answer: Resources are not equally good at producing both goods.

2. The allocation of resources
   The price of a product rises from $10 to $12 and the quantity supplied rises from 500 to 550 units. What is the PES?
   Show answer and working

   1. % change in quantity supplied = (550 − 500) ÷ 500 × 100 = 10%.
   2. % change in price = (12 − 10) ÷ 10 × 100 = 20%.
   3. PES = 10 ÷ 20 = 0.5, so supply is price-inelastic.

   Answer: 0.5 (inelastic)

3. Microeconomic decision makers
   A firm has fixed costs of $1000 and variable costs of $2000 when it produces 500 units. What is its average total cost?
   Show answer and working

   1. Total cost = 1000 + 2000 = $3000.
   2. ATC = 3000 ÷ 500 = $6.
   3. AFC = 1000 ÷ 500 = $2 and AVC = 2000 ÷ 500 = $4, which also add up to $6.

   Answer: $6

4. Government and the macroeconomy
   The CPI rises from 250 to 260 in a year. What is the rate of inflation?
   Show answer and working

   1. Inflation = change in CPI ÷ starting CPI × 100.
   2. (260 − 250) ÷ 250 × 100 = 10 ÷ 250 × 100 = 4%.

   Answer: 4%

5. Government and the macroeconomy
   Many workers lose their jobs because total demand falls during a recession. What type of unemployment is this?
   Show answer and working

   1. Cyclical (demand-deficient) unemployment is caused by a fall in total demand in the economy.
   2. Firms produce less, so they need fewer workers.
   3. It falls again when the economy recovers.

   Answer: cyclical unemployment

6. International trade and globalisation
   A government puts a tariff on imported shoes. Who gains and who loses?
   Show answer and working

   1. The tariff raises the price of imported shoes.
   2. Domestic producers sell more, and the government collects tariff revenue.
   3. Consumers pay higher prices and have less choice, and other countries may retaliate.

   Answer: Domestic shoe makers and the government gain; consumers lose.

More practice: Mock Test 1 · 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.