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WorksheetsEconomics Mock Exam Paper 1
Total questions: 60
Worksheet time: 1hrs 10mins
Inflation is...
A measure of price change
An increase in the rate of price increase
An increase in general price levels
A decrease in general price level
A decrease in general price level is called...
Hyperinflation
Low inflation
Deflation
Disinflation
Inflation caused by a rise in wage rates would be classified as..
Demand pull
Demand push
Cost pull
Cost push
Scarcity arises because all societies have
limited resources to satisfy unlimited wants and needs
unlimited productive resources to satisfy limited wants
limited needs and unlimited wants
unlimited needs and limited wants
Economics is the study of how
gov't allocates scare resources to satisfy people's unlimited wants.
gov't supplies money to businesses to produce goods & services.
Study of how society chooses to use scarce resources to satisfy its unlimited wants & needs.
businesses supply unlimited goods & services with limited resources.
The opportunity cost of a chosen item or activity is
the money you must give up to buy it
the value of all alternatives you must pass up
The value of the best alternative you pass up.
the money you lost by not choosing the least expensive option.
To an economist, a want is _________________________.
something you do not have
something other than a basic survival need
something you must have to survive
something most people have
Tangible objects that can satisfy people's wants.
land
labor
capital
goods
Amy can either eat an apple or an orange. What is the opportunity cost of eating the apple?
not eating the orange
eating the orange
not eating the apple
eating the apple
_____ are goods produced and used to make other goods or services
natural resources
human resources
capital goods
nondurable goods
GDP is the
total money value of the goods and services produced within a country in one financial year
total money value of the goods and services produced by local firms of a country (whether these firms are located by the country or away) in one financial year
broadest measure of the economies health
all of the above
Fiscal policy involves the government adjusting its_____ and ______
saving, spending
spending, investments
spending , taxes
taxes, wages
On the Production Possibilities curve, why is point "X" not a good outcome for this nation?
points inside the curve show that resources were saved
points inside the curve are impossible
points inside the curve show inefficiency- they could've produced more
points inside the curve show only positive results
Natural resources are goods that are
organic
easily created by humans
easily found
supplied by nature and not created by humans
Opportunity Cost is
the cost of an item
cost of an item you want but cannot have for reasons unknown
the next best alternative forgone
loosing an oportunity
Efficiency is when
you get a lot out of a scarce resource
get little out of a scarce resource
you get the most out of a scarce resource
get nothing out of a scarce resource
The Primary sector is also known as the __________sector
raw
first
extractive
compressed
Which sectors include manufacturing and construction
Primary
Secondary
Tertiary
None of the above
What are the factors of production?
limited quantities of resources to meet unlimited needs
a situation in which a good or service is unavailable
land, labor, and capital; the three groups of resources that are used to make all gods and services
natural resources that are sued to make goods and services
Land as a factor of production can be defined as
limited quantities of resources to meet unlimited needs
a situation in which a good or service is unavailable
land, labor, and capital; the three groups of resources that are used to make all gods and services
natural resources that are sued to make goods and services
In an attempt to increase the efficiency of its Staff, Management assigns specific tasks to each worker. This is an example of
specialisation
progress
productivity
entrepreneurial ability
An economy produces two goods, namely sugar and bauxite. What name is given to the curve which shows the maximum amount of bauxite that can be produced for every given amount of sugar?
Market supply curve
Demand curve
Production possibility frontier curve
Individual supply curve
To which of the following does the term 'legal tender' refer?
Money that government declares must be accepted if offered as settlement of debt
Money that has no direct backing of gold
Assets that can be converted immediately into a known amount of money
Assets which only perform the function of a store of wealth
Which of the following rewards accrues to the factor of production called 'capital'?
Rent
Profit
Wage
Interest
Which of the following strategies is NOT used by governments to influence economic decisions of businesses?
Increasing retirement benefits
Passing minimum wage legislation
Regulating the emissions of toxic waste
Identifying areas where businesses should be located
Some Caribbean countries are experiencing a lack of industrialization, a low standard of living and a high population growth rate. Which of the following terms BEST describes the economies of these countries?
Advanced
Developed
Developing
Agricultural
An outward shift in a production possibility curve can be caused by an
increase in prices
increase in wages
increase in imports
improvement in technology
Prices of goods in market economies fluctuate while prices of goods in planned economies tend to be fixed. The MOST likely reason for this difference is that in the market economy,
profits are lower
producers are never efficient
there are higher unemployment levels
demand and supply forces determine prices
In seeking to stabilize the economy of a Caribbean territory, the role of the government should be to
increase its taxes, borrow more and forecast revenues
encourage skilled labourers to stay within the territory
review its policy on taxation, borrowing and expenditure
import more consumer goods to satisfy the needs of the people
Price elasticity of supply refers to the responsiveness of the quantity supplied to a change in
price
income
demand
prices of substitutes
Based on the information in the table. the gross domestic product (GDP) is
$l 200
$1 230
$1 280
$2 200
The movement of the demand curve of Good X from D to D, results from an increase in
consumer income
the price of Good X
the price of a complement
the cost of inputs used to produce Good X
According to economic theory, 'second hand' cigarette smoke is an example of a
merit good
private good
positive externality
negative externality
Which of the curves above indicates that demand for the product is perfectly elastic?
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IV
The following information which relates to a manufacturing company.
Total fixed cost $10,000
Total cost $50, 000
Output 100 unit
The average variable cost is
$100
$ 400
$1000
$ 4000
The measure that is MOST likely to reduce inflation is
an increase in bank lending
an increase in import duties
a reduction in direct taxation
a reduction in government expenditure
The amount of net exports in an economy is given as -$10m. This indicates that the value of exports is
zero
equal to imports
less than imports
greater than imports
Large firms can achieve savings in unit costs as a result of advertising and packaging. These kinds of economies of scale can be classified as
financial
technical
marketing
managerial
When an economy which was once booming suddenly starts to experience low demand for goods and services, leading to companies and businesses closing down, rising unemployment and falling standards of living, the country is said to be experiencing
a recession
a revaluation
an externality
a disequilibrium
A pure public good can be described as
diminishable
zero-priced
excludable
rivalrous
Money is long-lasting, easy to carry around and can be changed into smaller denominations. Which of the following characteristics of money are being described
above?
Durability, portability, liquidity
Durability, scarcity, uniformity
Durability, portability, divisibility
Portability, uniformity, divisibility
Which of the following features is NOT a characteristic of perfect competition?
Freedom of entry and exit
Many buyers and one seller
Knowledge of market conditions
Selling of homogeneous products
Which of the following, is NOT a financial institution in an economy?
Trade union
Credit union
Commercial bank
Development bank
Which of the following are ways of calculating national income?
I. Income method
II- Elasticity method
III. Expenditure method
I and II only
I and III only
II and III only
I, II and III
One example of an 'entrepreneur' is
a shop owner
a store worker
a bank manager
an airline employee
Which of the following phrases BEST explains the term 'tariff'?
The amount of subsidies received by local exporters
The level of tax that is levied on imports entering a country
The amount of goods that can be imported into a country
The common tax levied by countries on member countries within a region
One of the functions of a commercial bank is to
issue notes and coins
provide loans to the public
determine the foreign exchange rate
keep the accounts of government departments
The Central Bank calls for an increase in the reserve requirements of commercial banks. How will this affect the operations of commercial banks?
Their liquid assets will be reduced.
Their ability to create credit will increase.
Their loans to money markets will increase.
They will attract less deposits from the public.
Which of the following is referred to as the banker's bank?
The World Bank
The Central Bank
A commercial bank
An investment bank
Unemployment that results from a change in technology and the resulting re-training and re-hiring of staff is an example of
structural unemployment
cyclical unemployment
frictional unemployment
seasonal unemployment
Which of the following are NOT considered factors of production in_ the bauxite industry?
Companies that use bauxite
Lands on which mines are located
Workers employed to work on the mines
Persons who invest their capital to carry out mining operations
In which of the following economic systems does the state • own ALL the factors of production EXCEPT Iabour?
A planned economy
A market economy
A mixed economy
A subsistence economy
An advantage of a planned economic system is that
there is usually a more equitable distribution of wealth
firms have a greater incentive to be efficient
workers are more motivated and diligent
consumers have a wider variety of goods
The restriction of international trade through tariffs, embargoes, quotas and exchange controls is referred to as
globalization
protectionism
a bilateral agreement
structural adjustment
The currency of a country may appreciate in value if there is an increase in
the demand for its imports
the demand for its exports
its balance of trade deficit
its balance of payments deficit
Production can be defined as the
interaction between buyers and sellers
transformation of inputs into outputs
pricing of resources according to demand
economic relationship between output and input
