NABALA SECONDARY SCHOOL

MID YEAR EXAMINATION

YEAR 11 ECONOMICS 2016

Time Allowed : 3 hours 10 minutes

(An extra 10 minutes is allowed for reading this paper)

INSTRUCTIONS

1. Write all your answers in the Answer book provided.

2. Write your Name on the front page of the Answer book.

3. If you require more paper, ask the supervisor for extra sheets. Attach this inside
the Answer Book at the appropriate places.

4. You may use a calculator, provided it is silent, battery- operated and non-
programmable.

5. There are three sections in this paper. Sections A and B are compulsory.
Note the choices in Section C.

SUMMARY OF QUESTIONS

Section Guidelines Total Marks Suggested Time

There are twenty multiple choice questions

A All the questions are compulsory. 20 36 minutes

There are three short-answer questions.

B All the questions are compulsory. 60 108 minutes

There are SIX essay questions.

C Answer any two question. 20 36 minutes

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Section A Multiple Choice (20 MARKS)
The multiple choice questions in this section are all compulsory.Each question
is worth 1 mark. In your answer book, circle the letter which represents the
best answer.

1.Economics is basically concerned with

A. The use of money in society
B. The allocation of scarce resources
C. Overseas trade and the balance of payments
D. The way in which government raises and spend revenue

2.Wants , whether individual or collective ,are

A. Limited
B. Re- current
C. Unchangeable
D. Non- competitive

3.Economic profit is equal to the total revenue minus

A. The real cost
B. The explicit cost
C. The explicit cost plus the real cost
D. The explicit cost plus the average cost

4.Mining in Fiji, as compared to agriculture , has

A. A low capital output ratio
B. A low capital to labour ratio
C. A high capital to labour ratio
D. A high labour output ratio

5.A “black market” is one that operates illegally. It occurs because of

A. Higher prices
B. Cheaper prices
C. A limited supply of resources
D. A shortage and high demand for the product

6.The role of financial institutions is to

A. Accept deposits and make loans to the government
B. Sell their resources to firms and borrow from households
C. Purchase labour from households and make loans to firms
D. Channel savings from households to firms in the form of loans.

7.Fiji does not have many mining industries because of

A. The high death rates involved
B. The lack of housing for its workers
C. The high risk of accidents and land slides

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 D. The substantial high risk of capital investment required
8.The farming of marine life on land is called
A. Aquaculture
B. Horticulture
C. Monoculture
D. Hydroponics

9.The three- sector circular flow model of the economy , what would a business
purchase from a household
A. Human resource
B. Natural resource
C. Capital resource
D. Factors of production

10.Which of the following is the best definition of productivity

A. Income per person employed
B. Real output per unit of output
C. Labour input relative to capital output
D. The change in aggregate output of the economy

11.Which if the following best illustrates land as a factor of production?

A. Stock agent’s car
B. Milking shed
C. Salesmanship
D. Shellfish

12.An example of tertiary industry relating to rice production in the tropical

Island Group’s economy is the
A. Growing of rice by the farmers of the economy.
B. Irrigation of land by state for the farmers
C. Purchase of rice from the distributors .
D. Harvesting of rice.

13.Economists define opportunity cost as the

A. dollar price of goods and services paid for by consumers.

B. value of the next best alternative use that is not chosen.
C. hidden cost imposed by inflation.
D. value of production goods.

14.Pen and Ink are complementary goods. Other things being equal, a decrease
in the demand for ink will occur if the price of:
A. pen increases
B. pen decreases
C. pencils increase

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 D. ink decreases

15. A demand schedule shows :

A. What a producer wants the consumer to demand
B. The quantity the consumers demand at each price
C. An outline of what consumers want
D. An outline of what producers want

16.The price where quantity demanded equals quantity supplied is

known as :
A. Consumer price
B. Equilibrium price
C. Market price
D. Producer price

17.In a market, the determination of prices through market forces of

demand and supply is termed as
A. Laissez faire
B. Price mechanism
C. Demand and supply
D. Consumer sovereignty

18. Fiscal policy is a government’s budgetary tool which

A. regulates interest rate
B. regulates the exchange rate
C. affects inflation in the long run
D. alters the revenue and spending

19.A responsible business firm is concerned with

A. profit maximisation
B. the easiest and fastest
C. reducing production costs even if quality declines
D. product quality, consumer safety, product packaging and labelling

20. Use the following information to answer this question.

Level of output Average Variable Cost

5 units $9
6 units $8

Assuming that the fixed cost of the firm is $10, the total cost of production of
the sixth unit will be :

A. $8
B. $9
C. $18

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 D. $58
SECTION B SHORT ANSWERS (60 Marks)

QUESTION 1 INTRODUCTION TO ECONOMICS (15marks)

A.
1. Scarcity implies choice among alternatives.
Explain this statement. (1mk)

2. Choose two pairs from the pairs of terms given below and clearly
differentiate between them.

 Factor income and factor returns

 Labour intensive and capital intensive
 Economic problem and financial problem (4mks)

3. State the three economic decisions made by any economy (1 ½ mks)

4. State one role of economists in the economy ( ½ mk)

5. State how L.C.Robbins defined economics (1mk)

6. State the difference between a dependent variable and an independent

variable (1mk)
B.
1. Use the table given below to draw a line graph on the axis provided in the
Answer Booklet

Years Percentage Pass

1 65
2 82
3 68
4 70
5 95

(2mks)

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2. y-axis

x-axis

Is there a positive or a negative relationship between the variables x and y

(1mk)
C.
1.Define the term opportunity cost (1mk)

2.Give two purpose of using graphs in Economics (1mk)

3.State one role of economists in the economy (1mk)

4.Define the term inflation (1mk)

5.Explain the concept of decrease in the purchasing power of income

(1mk)
QUESTION 2 MICROECONOMICS (25MARKS )
A.
i) Explain the major problem currently faced by the sugar industry. (1mk)

ii) Discuss how the problem mentioned above may affect the local economy
(1mk)
iii) Discuss briefly one way in which farmers have contributed to the
development of Fiji.

(1mk)
iv) describe the nature of the fisheries industry (1mk)

v) State TWO contributions made by the fisheries industry (1mk)

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vi) State TWO problems faced by the cash crop industry (1mk)

B. The following represents the demand and supply schedule for sun pop for a
given week. Use the information and your knowledge to answer the questions
that follow.

Price(cents per sunpop) Qty demanded (numbers) Qty supplied(numbers)

16 0 1200
15 200 1000
14 400 800
13 600 600
12 800 400
11 1000 200
0 1200 0

i) State the equilibrium price and quantity. (1mk)

ii) If the government sets the price at 15 cents per sun pop, what will the
market surplus be. (1mk)
iii) describe the term consumer surplus (1mk)

c. The graph given below represents the demand for story books.

DEMAND FOR STORY BOOKS

Price ($)

D2
D1
Number of books

State two reasons to explain what might have caused the change shown in the
graph. (2mks)

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d) Use the following information and answer the questions that follow
Albert works as a computer technician and earns $500 a week. His wife
Edwina works as an accounts clerk and earns $450 per fortnight

The expenses for the family are as follows :

Travelling $ 25 per week

Rent 300 per month
Food expenses 200 per fortnight
Entertainment 15 per week
Clothing 150 per month
Electricity expenses 55 per month
Insurance 600 per year
Hire purchase 90 per month

Required:
i) Prepare a fully classified budget for Albert’s family forecast for a
month (7mks)
ii) State two reasons for preparing a budget (1mk)
iii) Define the term inflation (1mk)
iv) State the effect of inflation on the purchasing power and the ability to
save. (2mks)
e).
Use the extract given below to answer the questions that follow

Jimmy had 152 000 from his saving, and he decided to use that money to start a grocery
business. By the end of the first year of operations Jimmy received income from sales as
$150 000 and he paid total expenses as $9500.
Jimmy could have earned $30 000 if he worked as a sales representative instead and he
could have deposited his saving into a fixed term deposit which could have earned him an
interest of 18% per annum.

i) Calculate the accounting profit for Jimmy (1mk)

ii) Calculate Jimmy’s economic cost (1mk)
iii) Calculate the economic profit (1mk)

f)
Use the extract given below and your knowledge to answer this question.

Mining is an extractive industry based on finite level of resources.

Explorations activities are high risk naturally include the use of specialists,
equipment, facilities and personnel. Mining industry is undertaken large
companies with huge capital and it is non renewable resource.
a) State the nature of the mining industry (1 mk)

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 b) Explain what is meant by the term non- renewable resources (1 mk)
c) State one problem associated with mining mentioned in the above extract
(1mk)
G. Differentiate between changes in Demand and changes in Quantity
Demanded and show using appropriate diagrams. (2mks)

H. State two factors (determinants) that affect demand (1mk)

I. Explain the term market as a place . (1mk)

J. Indicate with a tick how each of the following situations will affect the
demand for ice-creams in a particular school.

Situations Demand
Increase Decrease
A number of soccer teams visit the school
An increase in the price of ice-blocks
School roll decreases by 100 students
Year 13 students stay home after FSFE
(4mks)
QUESTION 3 MACROECONOMICS (20MARKS)
A.
i) Define the term economic growth (1mk)
ii) State two importance of real GDP (1mk)

B. State the term that describes national income measured in terms of

current prices (1mk)

C. Define Gross Domestic Product (GDP) (1mk)

D. Use the information provided in the table below to answer the
questions that follow .

Year Price Index Real GDP Nominal GDP

1 100 250 i
2 105 Ii 273
3 107 280 iii

i. Calculate the nominal GDP in year 1 (1mk)

ii. Calculate the Real GDP in year 2 (1mk)
iii. Calculate the Nominal GDP in year 3 (1mk)

SECTION C ESSAY WRITING (20 Marks)

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There are six questions in this section. Answer any two of the questions. Each question is
worth 10 marks.
For each question, write an essay of approximately 250 – 300 words to answer the question.
Note 1 mark is allocated for the structure and style of each essay.

QUESTION 1

“ The sugar industry is an important contributor to our economy”

Discuss the statement given above in terms of :

 Its major contribution to Fiji’s economic development.

 The problems that affect it .

 The government policies aimed at promoting its growth

QUESTION 2
“ Economics is an interdisciplinary subject”.
Discuss the above statement with reference to :

 Three definitions of economics by three different definitions of economics

 Three reasons why economics is a social science

 Three reasons why economics is a science

QUESTION 3
“Government plays a vital part in a mixed economy.”

Describe the role of government with reference to:

 Any three economic objectives of government.

 Any three types of government intervention.

 Any three economic functions of government.

QUESTION 4
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“Improved productivity levels benefit individual households, firms and the
economy as a whole”
Discuss this statement with regards to :

 The difference between production and productivity

 The methods by which productivity can be increased

 The benefits of productivity to Fiji’s economy

QUESTION 5

“At the micro level, the theory of supply and demand plays an important
role in maintaining the level at the equilibrium .”

Discuss this statement with reference to:

 The definition of the Laws of Demand and Supply and that at the
equilibrium.

 Any three factors that affect the supply.

 Any three factors that affect demand .

QUESTION 6

Select an industry in Fiji and discuss it in terms of:

 Its main features and its contributions to Fiji’s economic development

 The problems that affect its production; and

 The government policies aimed at promoting its growth.

THE END
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