This document consists of 11 printed pages and 1 blank page. IB16 11_9708_32/3RP © UCLES 2016 [Turn over *0929309474* Cambridge International Examinations Cambridge International Advanced Subsidiary and Advanced Level ECONOMICS 9708/32 Paper 3 Multiple Choice October/November 2016 1 hour 15 minutes 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, 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. DO NOT WRITE IN ANY BARCODES. 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.
2 © UCLES 2016 9708/32/O/N/16 1 What is the purpose of trying to achieve economic efficiency? A to achieve full employment B to achieve the cheapest possible price for products C to ensure resources are not wasted D to use as many resources as possible 2 In the diagram, a firm increases its output from OY to OZ. MC AR O Y Z costs, revenue output Which statement about the effect on economic efficiency is correct? A It will increase because a greater quantity will be produced and higher total revenue will be earned. B It will increase because the value that consumers place on the product comes closer to the cost of producing the last unit. C It will decline because both average and marginal revenue will fall. D It will decline because both total and marginal cost will rise. 3 A proposal for a new power station was rejected by the government because it was not socially beneficial. The government calculated that the private costs would be $800 m, private benefits $900 m and external benefits $300 m. What must have been true about the external costs of the power station? A External costs were equal to external benefits. B External costs were greater than $400 m. C External costs were less than external benefits. D There were no external costs.
3 © UCLES 2016 9708/32/O/N/16 [Turn over 4 What will happen if, in response to a fall in its price, a consumer buys more of a good? A a fall in the total utility derived from consuming the good B a movement along the consumer’s demand curve C a rise in the marginal utility derived from consuming the good D a shift in the consumer’s demand curve 5 The diagram shows two indifference curves and two budget lines for goods X and Y.