IGCSE Economics (9–1) 0987 · Topic 3

Microeconomic decision makers: past paper questions

143 real questionsasked in 9 of the last 10 exam series2020–2025usually: Discuss, Explain, Analyse, Identify, State

Real questions on microeconomic decision makers

The newest 20 of 54 written questions, plus 89 multiple-choice. Open one to see it on the real paper.

0987/22 · October/November 2025 · Q2d[8]
Discuss whether or not firms benefit from their workers undertaking training.
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0987/22 · October/November 2025 · Q3a[2]
Define average total cost.
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0987/22 · October/November 2025 · Q3b[4]
Explain how using renewable raw materials may affect a firm’s profits.
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0987/22 · October/November 2025 · Q3c[6]
Analyse the internal economies of scale that a cosmetics firm could experience.
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0987/21 · May/June 2025 · Q1h[6]
Discuss whether or not a growth in the size of firms in Gabon’s textile industry will reduce their average cost of production. Section B Answer any three questions. Each question is introduced by stimulus material. In your answer you may refer to this material and/or to other examples that you have studied.
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0987/21 · May/June 2025 · Q3d[8]
Discuss whether or not a rise in a national minimum wage will harm an economy.
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0987/22 · May/June 2024 · Q2c[6]
Analyse how the closure of firms may harm consumers.
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0987/22 · May/June 2024 · Q3b[4]
Explain how less education can reduce a person’s lifetime earnings.
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0987/22 · May/June 2024 · Q3c[6]
Analyse how the introduction of a minimum wage could affect unemployment.
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0987/22 · May/June 2024 · Q4b[4]
Explain two characteristics of money.
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0987/22 · May/June 2024 · Q4d[8]
Discuss whether or not consumers would benefit from firms buying new capital equipment.
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0987/22 · May/June 2024 · Q5b[4]
Explain two influences on demand for factors of production.
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0987/22 · October/November 2023 · Q1g[6]
Discuss whether or not the cost of producing clothes in Honduras will fall in the future.
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0987/22 · October/November 2023 · Q3a[2]
Define, with an example, a fixed cost.
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0987/22 · October/November 2023 · Q3d[8]
Discuss whether or not having fewer firms in a market will benefit consumers.
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0987/22 · October/November 2023 · Q4c[6]
Analyse what influences a farmer’s demand for labour.
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0987/21 · May/June 2023 · Q1c[2]
Explain one economy of scale that could benefit a coal-mining firm.
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0987/21 · May/June 2023 · Q2a[2]
Identify two functions of money.
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0987/21 · May/June 2023 · Q5a[2]
Identify two reasons why rich households spend more than the average household.
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0987/21 · May/June 2023 · Q5d[8]
Discuss whether or not a government should encourage firms to merge.
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What examiners said

This was quite well answered. A relatively high proportion of candidates developed points from the source material, making good use of relevant economics. There were some particularly good comments about the effects of increased training, more use of capital and lower unemployment. An example of a strong response: If the training of workers increases, they will be more skilful, effective, and pro...
— Examiner report, October/November 2023, 0987/22 Q1(g) (Cambridge)

As with Question 2(a) most candidates were able to give a relevant example. In this case, it was usually rent. Some candidates, however, provided an imprecise definition of a fixed cost. A number of these stated it is a cost which does not change without recognising that it does not change with output (in the short run).
— Examiner report, October/November 2023, 0987/22 Q3(a) (Cambridge)

There was a full range of responses to this question. A proportion of candidates just made unsupported statements. Others provided some relevant explanation but did not go into any depth. Some candidates produced a rather narrow answer, concentrating just on, for example, prices. A small number of candidates did not consider the impact of fewer firms on consumers. These examined the effects on the...
— Examiner report, October/November 2023, 0987/22 Q3(d) (Cambridge)

Practise this topic

Answer these questions online and get each one marked against the official mark scheme, with what you missed and how to fix it.

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In the syllabus

1 0455.3.1.1 — money The forms, functions and characteristics of money.

money The forms, functions and characteristics of money.
banking The role and importance of central banks and commercial banks for government, producers and consumers.

2 0455.3.1.2 — banking The role and importance of central banks and commercial banks for government, producers and consumers.

banking The role and importance of central banks and commercial banks for government, producers and consumers.

3 Households

the influences on spending, saving and Including income, the rate of interest and borrowing confidence – between different households and over time.

4 0455.3.3.1 — factors affecting an individual’s choice of Wage and non-wage factors. occupation.

factors affecting an individual’s choice of Wage and non-wage factors. occupation.
wage determination The influences of demand and supply, relative bargaining power and government policy, including minimum wage.
reasons for differences in earnings How changes in demand and supply, relative bargaining strengths, discrimination and government policy can all influence differences in earnings between workers whether they are: skilled/unskilled; primary/secondary/tertiary; male/ female; private sector/public sector. Definition, drawing and interpretation of diagrams that illustrate the effects of changes in demand and supply in the labour market.
division of labour/specialisation Advantages and disadvantages for workers, firms and the economy.

5 0455.3.3.2 — wage determination The influences of demand and supply, relative bargaining power and government policy, including minimum wage.

wage determination The influences of demand and supply, relative bargaining power and government policy, including minimum wage.

6 0455.3.3.3 — reasons for differences in earnings How changes in demand and supply, relative bargaining strengths, discrimination and government policy ca

reasons for differences in earnings How changes in demand and supply, relative bargaining strengths, discrimination and government policy can all influence differences in earnings between workers whether they are: skilled/unskilled; primary/secondary/tertiary; male/ female; private sector/public sector. Definition, drawing and interpretation of diagrams that illustrate the effects of changes in demand and supply in the labour market.

7 0455.3.3.4 — division of labour/specialisation Advantages and disadvantages for workers, firms and the economy.

division of labour/specialisation Advantages and disadvantages for workers, firms and the economy.

8 0455.3.4.1 — definition of a trade union.

definition of a trade union.
the role of trade unions in the economy Including engaging in collective bargaining on wages, working hours and working conditions; protecting employment; and influencing government policy.
the advantages and disadvantages of trade Factors influencing the strength of trade unions. union activity From the viewpoint of workers, firms and the government.

9 0455.3.4.2 — the role of trade unions in the economy Including engaging in collective bargaining on wages, working hours and working conditions; protecti

the role of trade unions in the economy Including engaging in collective bargaining on wages, working hours and working conditions; protecting employment; and influencing government policy.

10 0455.3.4.3 — the advantages and disadvantages of trade Factors influencing the strength of trade unions. union activity From the viewpoint of workers, fi

the advantages and disadvantages of trade Factors influencing the strength of trade unions. union activity From the viewpoint of workers, firms and the government.

11 0455.3.5.1 — classification of firms In terms of primary/secondary/tertiary sectors and private/public sector, and the relative size of firms. Note: deta

classification of firms In terms of primary/secondary/tertiary sectors and private/public sector, and the relative size of firms. Note: detailed knowledge of different types of structure of a firm is not required.
small firms The advantages and disadvantages of small firms, the challenges facing small firms and reasons for their existence.
causes and forms of the growth of firms Internal growth, for example increased market share. External growth, for example mergers.
mergers Examples, advantages and disadvantages of different types of mergers: horizontal, vertical, and conglomerate.
economies and diseconomies of scale How internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes.

12 0455.3.5.2 — small firms The advantages and disadvantages of small firms, the challenges facing small firms and reasons for their existence.

small firms The advantages and disadvantages of small firms, the challenges facing small firms and reasons for their existence.

13 0455.3.5.3 — causes and forms of the growth of firms Internal growth, for example increased market share. External growth, for example mergers.

causes and forms of the growth of firms Internal growth, for example increased market share. External growth, for example mergers.

14 0455.3.5.4 — mergers Examples, advantages and disadvantages of different types of mergers: horizontal, vertical, and conglomerate.

mergers Examples, advantages and disadvantages of different types of mergers: horizontal, vertical, and conglomerate.

15 0455.3.5.5 — economies and diseconomies of scale How internal and external economies and diseconomies of scale can affect a firm/industry as the scale of

economies and diseconomies of scale How internal and external economies and diseconomies of scale can affect a firm/industry as the scale of production changes.

16 0455.3.6.1 — demand for factors of production Influences to include demand for the product, the price of different factors of production, their availabil

demand for factors of production Influences to include demand for the product, the price of different factors of production, their availability and their productivity.
labour-intensive and capital-intensive The reasons for adopting the different forms production of production and their advantages and.
production and productivity disadvantages. The difference between, and influences on, production and productivity.

17 0455.3.6.2 — labour-intensive and capital-intensive The reasons for adopting the different forms production of production and their advantages and.

labour-intensive and capital-intensive The reasons for adopting the different forms production of production and their advantages and.

18 0455.3.6.3 — production and productivity disadvantages. The difference between, and influences on, production and productivity.

production and productivity disadvantages. The difference between, and influences on, production and productivity.

19 0455.3.7.1 — definition of costs of production Total cost (TC), average total cost (ATC), fixed cost (FC), variable cost (VC), average fixed cost (AFC),

definition of costs of production Total cost (TC), average total cost (ATC), fixed cost (FC), variable cost (VC), average fixed cost (AFC), average variable cost (AVC). Note: marginal cost is not required.
calculation of costs of production Calculation of TC, ATC, FC, VC, AFC and AVC. Definition, drawing and interpretation of diagrams that show how changes in output affect costs of production.
definition of revenue Total revenue (TR) and average revenue (AR). Note: marginal revenue is not required.
calculation of revenue Calculation of TR and AR. The influence of sales on revenue.
objectives of firms Survival, social welfare, profit maximisation and growth.

20 0455.3.7.2 — calculation of costs of production Calculation of TC, ATC, FC, VC, AFC and AVC. Definition, drawing and interpretation of diagrams that show

calculation of costs of production Calculation of TC, ATC, FC, VC, AFC and AVC. Definition, drawing and interpretation of diagrams that show how changes in output affect costs of production.

21 0455.3.7.3 — definition of revenue Total revenue (TR) and average revenue (AR). Note: marginal revenue is not required.

definition of revenue Total revenue (TR) and average revenue (AR). Note: marginal revenue is not required.

22 0455.3.7.4 — calculation of revenue Calculation of TR and AR. The influence of sales on revenue.

calculation of revenue Calculation of TR and AR. The influence of sales on revenue.

23 0455.3.7.5 — objectives of firms Survival, social welfare, profit maximisation and growth.

objectives of firms Survival, social welfare, profit maximisation and growth.

24 0455.3.8.1 — competitive markets The effect of having a high number of firms on price, quality, choice, profit. Note: the theory of perfect and imperfect

competitive markets The effect of having a high number of firms on price, quality, choice, profit. Note: the theory of perfect and imperfect competition and diagrams are not required.
monopoly markets Characteristics, advantages and disadvantages of monopoly. Note: diagrams are not required.

25 0455.3.8.2 — monopoly markets Characteristics, advantages and disadvantages of monopoly. Note: diagrams are not required.

monopoly markets Characteristics, advantages and disadvantages of monopoly. Note: diagrams are not required.

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