Cambridge IGCSE Economics (0455) — Past Papers, Revision Notes & Exam Prep

Exchange rate changes

MistakeYou get the price effects of a currency change backwards, so you choose an option where a fall makes exports dearer or a rise makes imports dearer.

Types of cost

MistakeYou mix up fixed, variable, total and average costs in a table or graph, such as giving average total cost (ATC) when average variable cost (AVC) is asked.

Maximum and minimum prices

MistakeYou mix up maximum and minimum prices, forget that a minimum set below equilibrium changes nothing, or confuse the jobs lost with the surplus of workers.

Inflation and growth rates

MistakeYou read a falling inflation or growth rate as falling prices or output, so you choose an option saying prices fell when inflation went from 5% to 3%.

PED and total revenue

MistakeYou link elasticity and revenue the wrong way round, so you choose 'elastic' when a price rise has increased total revenue.

Elasticity formula

MistakeYou put the price change on top of the elasticity formula, so you choose the tempting option that comes from dividing the wrong way round.

Interest rate effects

MistakeYou get the direction of monetary policy wrong, so you choose an option where lower interest rates cut inflation or higher rates encourage investment.

PPC positions

MistakeYou think putting unemployed resources back to work shifts the PPC outwards, or forget that a point inside the curve means resources are idle.

Explaining, not just naming

MistakeYou name a point such as 'economies of scale' or 'exports rise' but never show how it leads to the result, or skip the steps in between.

Two-sided discussion

MistakeIn a 'discuss' answer you argue one side only, or write the other side as your first point turned round, with no new reason behind it.

Using the data

MistakeIn 'analyse the relationship' questions you copy figures from the table without stating the link, or write general theory and never use the table.

Calculation slips

MistakeYou turn a formula upside down, divide by the wrong total, leave out the × 100, or lose 'million' or 'billion' between your working and your answer.

Precise definitions

MistakeYou define a term with the same word ('free trade is trading freely'), list examples instead of the meaning, or leave out a key part.

Labelling diagrams

MistakeOn demand and supply diagrams you leave axes or new curves unlabelled, swap the curves, or do not mark how the equilibrium price and quantity change.

Shift or movement

MistakeYou shift a curve when only the good's own price has changed, or shift the wrong curve, such as shifting demand when a tax raises sellers' costs.

Budget vs current account

MistakeYou mix up a budget deficit with a current account deficit, writing about exports and imports when the question is about taxes and government spending.