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COLLEGE

THIRD TRIMESTER EXAMINATION

Class : Subject:
Date: ____ MAY 2016
Year 10 ECONOMICS
(Paper One)
Multiple choice Time allowed: 50 MINUTES
Questions
Name: ID
Number:

READ THESE INSTRUCTIONS FIRST

Write in soft pencil.

Answer ALL questions.

There are thirty questions on this paper. For each question there are four possible answers A, B, C
and D.

Read carefully and follow instructions provided on the answer sheet

Each correct answer will score one mark. A mark will not be deducted for a wrong answer.

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1. Scarcity and shortage are concern with the availability of resources, goods and

services. How is scarcity similar to shortage?

A. Scarcity is permanent while shortage is temporal

B. They are all economic problems

C. The problem of scarcity cannot be solved but that of shortage can be solved

D. Scarcity is faced by all nations while shortage is faced by a particular nation

2. The diagram below shows the combination of two goods that a country can produce

with its available resources.

Good x

Good y

This diagram is called;

A. a production possibility curve C. a total product curve

B. opportunity cost curve D. production combination curve

3. Opportunity cost means that when a decision is made, something is forgone. What is

sacrificed when a decision is taken is known as

A. An identical alternative C. The least valuable alternative

B. Any alternative D. The next best alternative

4. The basic economic problem faced by all nations, which can never be solved is

referred to as

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 A. Shortage of goods C. Limited economic resources

B. High level of unemployment D. Low level of economic growth

5. The diagram shows a shift in demand for product Z

Price

D1 D

Quantity

Which of the factor from the following may have caused the shift from D to D1?

A. a fall in incomes C. a fall in the price of a complement

B. a fall in the price of a substitute D. a rise in the supply of Z

6. What information will you need to plot a market demand curve for a product?

A. the equilibrium market price of the product

B. the number of suppliers of the product at each price

C. the number of consumers willing to buy the product at each price

D. the quantity each consumer would be willing and able to buy at each price

7. The best explanation of the shift in the supply curve from SS to S1S1 would be:

S S1

Price

S S1

Quantity

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 A a fall in the price of the product C technological progress

B a rise in the price of raw materials D a rise in wages paid to labor

8. The diagram shows the demand for and the supply of bread.

A maximum price P1 is fixed by the government.

What is likely to be the immediate result of this?

A. A movement of the demand curve to the right C. A shortage of bread

B. A movement of the supply curve to the right D. A surplus of bread

9. The diagram shows a market for wheat that is in equilibrium.

Which area represents the total revenue for wheat farmers?

A. OTXY B. OVXZ C. OVXY D. OWXY

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10. The diagram shows the supply curve for a good.

What is the price elasticity of supply when the price rises from $2 to $4?

A.0.2 B. 0.5 C. 1 D. 2

11. Capital as an economic resource and a factor of production refers to

A. machines used to produce goods

B. money needed to start a business

C. a building used as a factory

D. All man-made goods used for further production

12. A worker leaves America to settle in China for the same type of job.

This movement can be described as?

A. Mobility of labor. C. Occupational mobility of labor

B. Geographical mobility of labor. D. Division of labour

13. Factors of production are employed to produce goods and services. These factors
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 are classified as fixed and variable factors.

The amount spent on fixed factors is known as?

A. total cost C. fixed cost

B. variable cost D. capital
14. A variable factor of production is one that could

A. be called labor

B. be increased or decreased as output increases or decreases

C. increase producers’ cost of production

D. have no effect on output in the short run

15. Cigarettes and alcohol are good examples of ____________ goods

A. non-durable consumer goods C. demerit goods

B. durable consumer goods D. merit goods

16. MTN Cameroon is a communication company found in many different countries. It

is an example of?
A. joint stock company C. private sector business
B. a profit making business D. multinational corporation
17. Some cooperative societies are financial institutions. From the list below, which of
the financial institutions is a cooperative
A. commercial banks C. credit unions
B. central banks D. the World Bank
18. A business created and managed by the government is referred to as
A. partnership C. public limited company
B. public corporation D. non-profit making business

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Use the graph below to answer question 19

Cost Y

Output per period

19. The curve Z on the diagram represents
A. average cost curve C. Variable cost curve
B. fixed cost curved D. total cost curve

Use information from the diagram below to answer question 20 and 21

Total revenue

Cost/revenue Y total cost

Output
20. The point X on the graph indicates?
A. losses
B. profits
C. break-even
D. does not indicate anything

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21. At point __________, the firm experiences a loss

A. W C. Y

B. X D. none of the above points

22. A market can be defined as

A. a place where people sell goods and services

B. a place where people buy goods and services

C. a place where people buy and sell goods and services

D. any means through which a buyer and a seller can interact

23. The main characteristic of a perfect competitive market is that

A. there are many buyers and sellers in the market

B. the firms in the market produce identical or homogenous products

C. firms can freely enter into or leave the market

D. firms are price takers

24. A monopoly is described as

A. a single buyer of a good or service

B. A single supplier of a good or service

C. someone who decides how much to charge for his goods

D. someone who decides on the quantity of his goods to sell

25. An imperfect market structure is characterized by

A. product differentiation C. few large firms dominating

B. homogenous products D. barriers to entry

26. An imperfect competitive market is different from a perfect market in that

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 A. there are many buyers and sellers in the market

B. firms are free to enter or leave the market

C. firms employ both price and non-price competition methods

D. information flows perfectly in the market

27. An oligopoly is defined as a market structure in which

A. there is only one buyer and one seller

B. there is only one seller and many buyers

C. many small firms dominate the market

D. a few large or giant firms dominate the market

28. A firm may substitute more capital for labor in production if

A. the cost of borrowing rises C. profits fall

B. wages rise D. labor productivity rises

29. Which costs will be reduced if a factory decreases the amount of pollution it causes

to the environment?

A. Average costs C. Fixed costs

B. External costs D. Variable costs

30. What is an example of market failure?

A. A monopoly making abnormal profit

B. Prices charged to cover social cost

C. The closure of small, independent shops in a rural area

D. The inability of a car producer to achieve economies of scale

GOODLUCK

END

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