Rustomjee Cambridge International School & Junior College
First Term ExaminationSUBJECT: Economics – Section A GRADE: IX Div: ______
Question No. Marks Obtained
Q.1. Choose the correct alternative (5 marks)
1. A hospital cannot treat all the people that need treatment. This is an example of A excess supply. B limited wants.
C scarcity. D unlimited resources.
2. Economic growth in Russia and China used to be led by the public sector. Now it results more from activities in the private sector. However, both sectors are important. Which term describes the current system in Russia and China?
A market B mixed C planned D subsistence
3. The table shows how employment in five industries changed in a country between 1985 and 2000.
Name: _____________________________________________________Roll No.__________
According to the table, which type of employment has increased? A primary B secondary
C tertiary D total
4 What is necessary for a company to be classified as a multi-national? A It diversifies its range of products.
B It exports most of its output.
C It increases its scale of production.
D It produces some of its output in different countries
5. The diagram shows the demand for chocolate.What could cause the movement from point X to point Y?
A a change in tastes
B a fall in the price of chocolate C an increase in income
D a successful advertising campaign for chocolate
6. In many countries, extra staff are employed by the postal service and additional collections of post are made to clear the large amount of mail before holiday periods.
What happens to the demand and supply curves for postal services during these periods?
7. Which of the following is true for any inelastic demand curve? A A price cut causes a fall in expenditure.
B A price rise has no effect on demand. C A price rise has no effect on total profit.
D The percentage change in demand is greater than the percentage change in price. 8. The graph shows the market for rice. It was in equilibrium at X. Later, there is a very good harvest of rice. What is the new equilibrium point?
9. What is unlikely to be a feature of a large firm in a monopoly position in a market? A It achieves economies of scale.
B It will attract government attention. C It charges high prices.
D It experiences intense competition in that market.
10. A commercial bank is appointed to act as a country’s central bank. What new function would it now have?
A controlling monetary policy B dealing in foreign exchange C ensuring security for loans D holding liquid assets
Q.2. Answer the following questions
1.In Ghana local farmers manage small plots of land for subsistence farming. However, some have benefited by selling pineapples at an agreed, fixed price to an exporter. The
exporter provides finance, training, fertilizers and machinery and even building materials for the farmers’ homes [10]
(a) Identify and explain which factors of production are mentioned above. [4] (b) In 2005, European supermarkets changed their demand to a new, sweeter pineapple not grown in Ghana. Use demand and supply diagrams to explain what happened in the market for both types of pineapple. [6]
2. A company produces cigarettes which it believes have a low price elasticity of demand. [10]
(a) Explain what is meant by price elasticity of demand. [4] (b) How might knowledge of price elasticity be of use to a producer? [6] 3. In 2007, it was reported that a trade union of post office workers feared that increased capital investment would mean more automation and job losses. The union demanded
that managers allow higher wages and shorter working hours for its members. [5 ]
(b) Describe the functions of a trade union. [5] 4. Many governments have increased their spending on police and armed forces but there is an opportunity cost of this policy. [20]
(a) Explain the term opportunity cost and discuss why an increase in spending on police and armed forces may result in an opportunity cost. [4] (b) Discuss whether such government spending could be a result of market failure. [6]
(c) Sometimes governments do not provide goods and services but they still influence the activities of private firms. Analyse how they might do this. [10]
Section -B
A. Write only the correct option number in answer sheet. Number your answer correctly. [5]
1. A production unit produces foot-balls and foot-ball clubs. But due to more demand for the foot-ball clubs; production manager decides to produce fewer foot- balls and more foot-ball clubs. What is the opportunity cost of producing more foot-balls? a) The cost of retraining workers to make foot-ball clubs
b) The cost of transporting and selling the extra foot-ball clubs produced c) The materials bought to make extra foot-ball clubs
d) The foot-balls that will not now be produced 2. What is an example of market failure?
a) A growth of competition b) An existence of scarcity c) A spread of pollution d) A surplus of production
3. The table shows how a firm’s total cost rises with changes in output. output total cost ($)
0 20,000
1000 30,000
2000 45,000
3000 40,000
4000 45,000
5000 50,000
a) $4 b) $5 c) $6 d) $10
4. General Motors, a large multi-national company based in the United States, sold some of its European car assembly plants to other car manufacturers during the world recession (economic downturn) in 2009. Which economic reason would have been most likely to influence this decision?
a) To benefit from horizontal integration of manufacturing b) To diversify and expand its product range
c) To encourage vertical integration of sales and production d) To reduce its excess capacity in car production
5. A university rejects 2000 qualified applicants who wish to study there.
What factor of production could have caused the university to make this decision? a) Infinite quantity of capital
b) Scarcity of labour c) Surplus of land
d) Unlimited supply of enterprise
6. Which action by the operators of an Airport directly reduces external costs? a) The stopping of night flights
b) The building of a new runway c) The payment of productivity bonus
d) The reduction of charges for landing aircraft
7. Every business organisation faces the problem of satisfying wants. What is the reason why wants are not fully satisfied?
a) An economy can only produce a limited amount of goods and services. b) Governments cannot print enough money to pay for goods and services. c) There is an over-production of goods and services by business organisations. d) Workers are too skilled for the requirements of the jobs available.
8. Which statement about total fixed cost is correct? a) It falls as output increases.
b) It is calculated by adding total cost and total variable cost. c) It is calculated by dividing total cost by output.
d) It must be paid even if output is zero.
9. Which statement about the factors of production is correct? a) A river from which a company draws water is called land. b) Raising finance for a company is called capital.
c) Supervisors employed in a company are called enterprise. d) The owner of a company is called labour.
10. The government of a country with a rapidly increasing population decides to switch resources from investment to increased subsidies to farmers. What is the opportunity cost of this decision?
a) the profit earned by farmers
b)the rent of the land on which food is grown c)the reduction in investment
d) the wages of the farm workers
B. Car production in the United States has changed dramatically during the last forty years. The managers of the firms have decided to use more advanced machinery and fewer employees to produce the cars.
(a) Identify and explain the factors of production in the information above. [3]
b) Most car producing firms are now very large. Explain how they may have benefited from:
(i) Horizontal integration [1]
(ii)Vertical integration. [1]
C. The Government of Bangladesh is planning to build a new motorway with the help of private companies. It recognises that there are a number of costs and benefits, both private and social, that need to be taken into account before a final decision is taken.
(a) Explain what is meant by
(ii) A private benefit
(iii) An external cost
(iv) An external benefit.
(b) For each of the following, identify one example of (i) a private cost, (ii)
a private benefit,
(iii) An external cost and (iv) an external benefit that might be involved in the building of a motorway. [4]
(c) Why might a government want to involve private companies in a motorway project? [4]
(d) Discuss how nearby communities are likely to be affected by the building of a motorway. [8]
