UCSI INTERNATIONAL SCHOOL

End of Quarter 1 Examination

STUDENT
NAME

STUDENT
CLASS

Year 9 24th January 2022

Economics 1 Hour 30 Minutes

READ THESE INSTRUCTIONS FIRST

Write your name on all the work you hand in.

Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs.
Do not use staples, paper clips, glue or correction fluid.

Answer all questions.

Calculators may be used.

You may lose marks if you do not show your working or if you do not use appropriate units.

At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

Mark ............ / 50

Percentage ....................%

Teacher’s
Signature

This document consists of 10 printed pages and no blank pages.

[Turn over]

0
Part 1
1. Which feature is a characteristic of a market economy?
A Government planning plays a key role in the economy
B Producers respond automatically to changes in consumer demand
C Resources are allocated according to need
D There is always full employment

2. What is a mixed economy?

A One in which both capital and consumer goods are produced
B one in which both necessities and luxuries are produced
C one in which there is both an agricultural and a manufacturing sector
D One in which there is both a private and public sector

3. A country changes from a planned to a market economy. What effect will this have?
A A decrease in government officials
B A decrease in the role of the price mechanism
C An increase in state ownership of resources
D An increase in the output of public goods

4. Which event would cause an increase in demand for petrol?

A An increase in concern for the environment
B An increase in the tax on diesel
C A decrease in disposable income
D A decrease in population size

5. What is a meant by a contraction in demand?

A A reduction in demand due to a rise in the price of the product
B A reduction in demand due to a fall in the income of the population
C A rise in demand due to a rise in the price of a substitute product
D A rise in demand due to a fall in the price of a complement

6. Which event would cause the demand curve for air travel to shift to the left?
A A fall in the safety of sea travel
B A fall in the cost of air fuel
C A rise in the price of foreign holidays
D A rise in the size of the population

7. Which pair of products is an example of complement goods?

A Bread and butter
B Beef and leather
C Cars and bicycles
D Computers and tablets

1
8. Which change could explain the shift of the supply curve for a product from SS to S1S1 as
shown in Figure 2.3?

Figure 2.3

A A fall in price from P1 to P

B A rise in the quantity demanded from Q to Q1
C A reduction in the cost of producing the product
D The imposition of a tax on the product

9. What is meant by equilibrium price?

A The lowest possible price for a product
B The most profitable price for a product
C The price which equates the demand for and supply of a product
D The price which equates the number of buyers for and sellers of a product

10. Figure 2.4 shows the demand for and supply of gold mined in a country. Which
combination of events could explain the rise in the price of gold?

Figure 2.4
A A decrease in the price of silver and a subsidy given to gold a miners
B A decrease in the taste for gold and an improvement in the technology used
in gold mining
C An increase in incomes and an increase in the cost of mining gold
D A decrease in the taste for gold and an improvement in the technology used
in gold mining

2
11. Why does travel by private jet have elastic demand?
A It is a luxury form of travel
B It is a necessity
C It has to be arranged some time in advance
D It has no close substitutes

12. A rise in the price of a product from $50 to $60 causes demand to fall from 800 to 760.
What is the price elasticity of demand?
A -0.25
B -0.5
C -2.0
D -4.0

13. The price elasticity of demand for a product is-0.3. What effect will a fall in its price
have?
A A decrease in total spending on the product
B A shift to the right of the demand curve
C A more than proportionate change in quantity demanded
D No change in the quantity demanded

14. What is meant by price elasticity of supply?

A The extent to which price changes when there is a change in supply
B The extent to which a firm can raise the price of a product whilst keeping the
supply unchanged
C The responsiveness of supply to a change in the cost of production
D The responsiveness of supply to a change in price

15. Which advantage is a characteristic of a pure market economy?

A An even distribution of income
B Efficiency
C The encouragement of the consumption of merit goods
D The production of public goods

16. Between 2005 and 2015 the number of late-night music clubs in the UK fell from 3144 to
1733. The causes were said to be the increase in the cost to clubs of planning regulations
and the increase in alternative ways of meeting people on social media.
How would the effect of these causes be shown on a demand and supply diagram for
entrance to late-night music clubs?
Planning regulations Increase in dating websites

A movement down the supply curve shift of demand curve to left

B movement up the supply curve movement up the demand curve

C shift of supply curve to left shift of demand curve to left

D shift of supply curve to right shift of demand curve to right

3
17. What is the government most likely to produce in a mixed economy?
A all of the services and none of the goods
B amounts of goods and services equal to those of the private sector
C no goods and services
D some of the goods and services

18. What is an example of a public good that everyone can enjoy, regardless of income
levels?
A Education
B Flood defences
C Healthcare
D Postal services

19. What is a reason for public expenditure (government spending)?

A To increase external costs
B To provide support for vulnerable groups
C To reduce the mobility of resources
D To subsidise demerit goods

20. It was reported that the supply of oil would be affected by the discovery of new oil fields
and demand would be affected by rapid global economic growth.

If point X is the initial equilibrium point, which point could represent the new equilibrium?

21. A product's price elasticity of demand changes from-0.8 to-0.5. What does this mean?
A A rise in price will now cause demand to extend
B A rise in price will now cause total revenue to fall
C The product has become less responsive to a change in price
D The product has risen in price

4
22. In recent years the price of crude oil on the world market has fallen dramatically. One
cause has been the increase in oil obtained by the new extraction process of fracking.
How is this shown on a demand and supply diagram of the market for crude oil?
A a shift in the demand curve to the left
B a shift in the demand curve to the right
C a shift in the supply curve to the left
D a shift in the supply curve to the right

23. Which is an example of a merit good?

A Education
B Cigarettes
C Tables
D Internet

24. A product has a price elasticity of supply of 0.8 and a price of $60. By how much would
the price have to increase to cause supply to rise from 200 to 240?
A $8
B $15
C $30
D $48

25. A market is initially in disequilibrium. The price then falls to restore the market to
equilibrium. What will happen to demand and supply as this movement occurs?

Demand Supply
A contract contract
B contract extend
C extend extend
D extend contract

26. The table shows the demand and supply for spices in a market in Africa.

When the price rises from US$20 to US$30 per kg, what is the price elasticity of demand
(PED) for spices?
A 0.25
B 0.5
C 1.0
D 2.0

5
27. The diagram shows the market for a firm making clothing with an initial equilibrium of X.

What will be the new equilibrium if there is a successful advertising campaign by a rival firm
and an increase in workers’ wages?

28. Who determines what goods and services are produced in a market economy?
A consumers
B employees
C government
D trade unions

29. The diagram shows the demand for and the supply of air travel.

What could cause a shift of the demand curve from D1 to D2?

A an increase in airline costs

B an increase in airport taxes
C an increase in incomes
D an increase in worldwide terrorism

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30. The demand for cocoa beans is price-inelastic.
What is most likely to decrease as a result of an increase in demand for cocoa beans?
A price of cocoa bean products
B production of cocoa beans
C profits of cocoa bean producers
D unemployment among cocoa bean farmers

Answer Sheet

1 11 21

2 12 22

3 13 23

4 14 24

5 15 25

6 16 26

7 17 27

8 18 28

9 19 29

10 20 30

Total _____/30

7
Part 2
Answer all questions.
Section A
Question 1
Droughts in the Pacific Coast region of the US and regulations, in the forms of limits on the
amount of salmon that can be caught in the wild, have reduced the supply of wild salmon.
These limits were imposed to avoid the overfishing of salmon. However, the effect of this on
the revenue of salmon producers is uncertain. In addition, producers of farmed salmon in
the US states of Washington and Alaska have received subsidies from the US government.

(a) Define supply. [2]

(b) Explain two reasons why supply for salmon may have fallen. [4]
(c) Analyse how information on changes in a firm’s revenue can be obtained from price
elasticity of demand calculations. [6]
(d) Discuss whether or not government subsidies are beneficial to producers. [8]

Question 2
Productivity has fallen recently in Finland particularly in the public sector. The country has
also experienced a sudden decrease in demand. In recent years the price elasticity of
demand and the price elasticity of supply of the products made by Finnish firms have
changed.

(a) What is the difference between the private sector and the public sector? [2]
(b) Explain what is meant by ‘demand’. [2]
(c) Explain two reasons why demand has decreased in Finland. [4]
(d) Analyse how an increase in the price elasticity of demand (PED) and the price
elasticity of supply (PES) of its products could benefit a firm. [6]
(e) Analyse the factors that can make the supply of a product more price-elastic. [6]

Total _____/20