End of Year Exams

Department: Humanities Number of Students:

Teacher Setting Exam: D.Gray Exam Date: Monday 20th May

Subject: Economics Time of Exam: 1.20 – 2.50

Grade: 9 Room: TBC

Equipment Required to be available for students:

 Lined paper
 Stapler

Prior To Exam
o Do not OPEN this examination paper until instructed to do so.
o You are permitted access to a calculator for this paper.
o Answer ALL questions from Section A and three questions from Section B.
o Use fully labelled diagrams and references to examples where appropriate.
o Complete the multiple choice questions (Part A) in this booklet and answer Part B
questions on the lined paper provided

Conducting the Exam

EXAM TIME
 Writing Time - 1 hour 30 minutes

At the Conclusion of the Exam

 Put your name on each page of your lined paper
 At the end of the exam staple your answers to this paper
 Return Test to: Vijay
Part A: 20 multiple Choice (approx 30 mins) – Complete all answers on this paper
1. What is the basic economic problem facing all societies?
A. how to achieve price stability
B. how to keep employment levels high
C. the extent to which incomes should be redistributed
D. what will be produced, how and for whom

2. If all of the resources are used efficiently, suppose that a firm can produce the
following combinations of goods A and B:
Good A Good B
63 0
54 10
45 20
36 30
27 40
18 50
9 60

What is the opportunity cost of producing 45 units of Good A?

A. 10 units of Good B
B. 70 units of Good B
C. 20 units of Good B
D. none of the above

3. A major airline needs a range of people and equipment. These can be divided into
factors of production. Which is allocated to its correct factor of production?
A. aircraft - capital
B. computer network - land
C. pilots - enterprise
D. shareholders - labour

4. Which argument can be used in favour of the market economy?

A. It enables consumers to show their preferences for goods.
B. It ensures that all capital resources are used.
C. It guarantees full employment.
D. It leads to an equal distribution of wealth.
5. Which of the following can change without shifting demand?
A. Income.
B. Taste.
C. The price of the good itself.
D. The prices of other goods.

6. Choose the description that best represents the change in the market for oil for the
following quotation: Iraq "invaded Kuwait and shut down its oil production."
A. the supply curve shifts left.
B. the supply curve shifts right.
C. the demand curve shifts left.
D. the demand curve shifts right

7. Suppose the quantity demanded of typewriters at an office supply store falls from 40
to 20 typewriters per month as a result of an increase in price from $150 to $200.
The absolute value of the price elasticity which can be calculated is:
A. Less than or equal to zero.
B. Between zero and 1.0.
C. Equal to 1.0.
D. Greater than 1.0

8.

A.
B.
C.
D. _
9. Which outcome is an example of Market failure?
A. Consumers paying a higher price for a product who’s demand is rising
B. Consumers exercising their market power by determining what is produced
C. Producers basing their output decisions on private rather than social costs and
benefits
D. Producers earning a higher profit from switching from unpopular products falling
in demand to producing those rising in demand

10. Social costs:

a. Are less than private costs.
b. Include private costs.
c. Are unrelated to private costs.
d. Do not affect society

11. What function does a central bank provide for the general public?
A. accepting deposits
B. issuing banknotes
C. making loans
D. providing overdrafts

12. A person is keen to repay a large debt owed on his credit card. What is likely to
cause that person to reduce the credit card repayment and spend more from his
weekly wage?
A. an increase in interest rates
B. an increase in the price of essential products
C. an increase in the range of products available
D. an increase in weekly earnings

13. Why are farm workers likely to be paid a lower wage rate than workers in
manufacturing?
A. Farm workers are more likely to be in a trade union.
B. Farm workers are more likely to have a shorter working life.
C. Farm workers are more likely to have poorer working conditions.
D. Farm workers are more likely to produce goods with a lower value.

14. What is likely to be found when comparing high income earners with low income
earners?
A. High income earners pay a lower proportion of their income in direct tax.
B. High income earners spend a lower proportion of their income on food.
C. High income earners spend a lower proportion of their income on foreign travel.
D. High income earners save a lower proportion of their income.

15. What would encourage a rise in spending but not a rise in saving?
A. easier credit facilities
B. more people working
C. rising interest rates
D. rising standards of living
PART B - complete all answers on lined paper provided: (Approx 1 hour 06
minutes)

You must complete the compulsory question from Unit 1

You must choose to complete 2 questions from units 2,3 & 4

Unit 1 – Compulsory Question

1. A proposal has been put forward to build a new runway at an airport.

(a) Explain the term opportunity cost in the context of the government allocating land for
the building of a new airport. [4]

Units 2, 3 & 4 – Choose 2 questions from the three below

2. Firms are keen to know what influences consumers in their buying decisions.
Publishing firms in India have researched why people buy particular magazines and
have found that the price elasticity of demand for different magazines varies.

(a) (i) Using a demand diagram, show an increase in demand for a product. [2]
(ii) Identify two causes of such an increase in demand. [2]
(iii) Explain one of the causes identified in part 2 [2]
(b) Explain what is meant by price elasticity of demand. [6]
(c) Discuss how knowledge of the price elasticity of demand for magazines may be
used by a firm which produces and sells magazines. [8]

3. Commercial banks perform an important role in most economies. Money helps in the
exchange of goods and services and, in the form of wages, is an influence on the
choice of occupation for many individuals.

(a) Explain the role of commercial banks. [4]

(b) Describe the various functions that money performs in an economy. [4]
(c) Describe the likely changes in income for individuals over their lifetime. [4]
(d) Discuss whether wages are the most important factor influencing the choice of
occupation for many individuals. [8]

4 .The size of firms in the United Arab Emirates can vary enormously, from very small
sole proprietor businesses to very large public limited companies.
(a) Describe the disadvantages of a sole proprietor business. [4]
(b) Explain why a private limited company might wish to become a public limited
company. [6]
(c) Explain how firms can grow in size. [4]
(d) Discuss whether some large firms might benefit from reducing their size. [6]